Quarter of GM hourly staff leaving, but is it enough?

By MCCLATCHY TRIBUNE AND GAZETTE STAFF  Friday, May 30, 2008
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— More than a quarter of General Motors hourly workers are expected to leave by the summer as a result of a recent buyout and retirement offer, the company said amid reports that Chairman and CEO Rick Wagoner will announce additional restructuring measures at the company’s annual meeting Tuesday.

It’s uncertain whether those new measures will involve GM’s assembly plant in Janesville, where a 35 percent cut in production already is scheduled to take effect in July, when the second shift is eliminated.

GM said Thursday that 19,000 of its 73,000 hourly workers have signed up for buyouts and retirement offers. Workers will be expected to leave by July.

While the number leaving is far higher than that of a similar program at Ford Motor Co. earlier this year, it is a bit below the number GM targeted under its special attrition program offers, also called the SAP.

“We had hoped that 20,000-25,000 would take the SAP at GM—setting up at least 12,000 hires this fall,” said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich. “I think GM assumed this also. So GM is much closer to its target than Ford.”

Ford saw about 4,200 take its offers, but had hoped to entice 10,000 hourly workers to leave, he said.

Both automakers had hoped to use the buyout and retirement offers to move their older workers off the payrolls. Both automakers say they have more workers than they need given the growing competition and their shrinking market shares in the United States.

GM has not released plant-specific numbers for the SAP, but sources have told The Janesville Gazette that about 600 of the Janesville plant’s 2,400 workers will leave the facility. The 25 percent take-rate in Janesville mirrors the national rate reported by the automaker Thursday.

McAlinden said GM had hoped to have enough workers take the buyout and retirement offers that it could not only trim its workforce but also take advantage of a clause in the most recent UAW contract that allows the automaker to hire new workers at a lower hourly wage and with a lesser benefits package.

“This attrition program gives us an opportunity to restructure our U.S. workforce through the entry-level wage and benefit structure for new hourly employees,” Troy Clarke, president of GM North America, said in a statement. “We appreciate the UAW’s support in making business improvements that provide a more secure future for General Motors and its employees.”

GM’s latest buyout brings to about 53,000 the number of hourly workers the automaker has cut in the past two years as part of a North American turnaround plan that has cut $9 billion in fixed costs, but has yet to return the automaker to positive cash flow or profitability.

In light of those struggles and mounting pressures from rising gas prices, a weak U.S. economy and a rapid and ongoing shift in consumer preferences to cars and crossovers from large trucks, Wagoner is expected to unveil a new restructuring plan at the automaker’s annual meeting on Tuesday.

People familiar with the planning said the latest restructuring measures are likely to include production cuts for pickups, large SUVs and mid-size trucks and news of increased production for its cars and crossovers.

Earlier this year, GM announced that it will cut second shift production and up to 750 jobs in Janesville because of sagging sales of the full-size SUVs built here and at plants in Arlington, Texas, and Silao, Mexico. The automaker, however, has not announced any cuts for the Silao or Arlington plants.

“GM MUST cut light truck capacity,” McAlinden told the Detroit Free Press in an e-mail.

GM still has the capacity to build 1.7 million of its largest vehicles, from Escalades to Silverados, in North America, McAlinden said. “They probably only need 1 million units at most due to the structural change in the market. … So, we worry. Pontiac East, Flint Truck & Bus, they are all at risk.”

When asked specifically about the Janesville plant, McAlinden said in an e-mail to the Gazette that the local plant is much closer to GM’s major truck component plants in Indiana, Michigan and Ohio than the Arlington plant.

“Janesville Assembly and Local 95 have received a strong product renewal guarantee in the new national agreement ratified last fall,” McAlinden said. “Any further speculation is dangerous.”

That guarantee, however, is subject to market and economic conditions, neither of which is good.

“The truck market is collapsing—permanently,” he said. “The boom has gone bust.

“GM should have been better prepared, and we all know it.”







reader COMMENTS (40)
ImgladileftGM
May 31, 2008 at 9:12 a.m.
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benthinkin. You are a funny child. I left on my own terms and it has been great. I didn't want to go down on the Titanic. Have fun and say Hi to Jack when you sick to the bottom!

kiowamohican
May 31, 2008 at 3:03 a.m.
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beenthinkin:
You'll never get an e-mail. It always works that way with people like this (trust me I know from LOTS of experience). They talk a big game, and make all these cute comments, but anytime you challenge them to put their $$$$ where their mouth is, they always will find a way to weasel out of it.

2/4/2009 it will be closed?...
I'll put up $10,000 CASH (no joke) that it WON'T be, if your booking bets on it.

benthinkin
May 31, 2008 at 1:05 a.m.
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Hey jackson, how much do you want to back your mouth up with related to that date???
Name your price...
You win, you can have the money cause you will need it to move outta mom's basement,
I win, I donate your losings to a charity... assuming you can pay up.
I will be waiting for your e-mail to set it up.
We'll let Stan hold the money so it don't skip town

benthinkin
May 30, 2008 at 10:56 p.m.
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Hey, I am pretty sure that I remember you from the plant. I am glad to see you are doing well considering you were let go.
It's amazing how you can still be jealous after finding such great success...

ImgladileftGM
May 30, 2008 at 9:29 p.m.
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All of this crying is actually funny. I quit GM a few years ago for a much better job. I kick myself in the butt wishing I would've done it long ago. If it means anything to you GM hourly folks, you aren't the only ones who are whiners! All you unions are the same way.....expect everything when times are good and still want them when times are bad. The years of the cash cow are gone. I suggest you get out and find something better. To all the salary folks still working there.....get out and find another job because it's much better somewhere else. To all the hourly... accept the pay cuts and earn the money you have skills for. Would you pay someone $100,000+ to cut the grass at a company you owned? If so, let me know so I can apply and make your life miserable like you do to everyone down at the plant.

Beentheretoo
May 30, 2008 at 7:08 p.m.
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I worked for GM for 36 years and was a member of management 34 of those years. Local boy says that the hourly take the brunt of the economic and the monetary hit. I'm here to tell u that middle management suffers as much if not
more than the hourly employees before and after retirement. A lot of people are under the misconception that GM workers are rich. That is not the case. We have expenses like everyone else. It is a sad day when a shift is eliminated because everyone in Janesville is going to feel the impact, burger joints , banks ,small business and GM

sam
May 30, 2008 at 4:38 p.m.
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maybe with all these lay-offs the movie industries can start making thier money again all the bootleggers won't have any where to sell there movies

rockstars
May 30, 2008 at 4:26 p.m.
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I worked in management there recently and can say for 100% accuracy that there are so many employees that bust their butts there for the money they make. Please don't stereotype all UAW members based on the actions (or lack thereof) of only a handful. And, by the way, I am NOT pro-union. I'm against it. But I am pro-employee! GM, nor Ford, nor Chrysler, got where they were (for better or for worse) on the hard work of their frontline employees. Even as management, I felt a sense of pride watching every vehicle go out that door, and am positive that there are so many line workers that feel the same way!

etowntomilton
May 30, 2008 at 4:19 p.m.
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The buyouts may help, but until they start realizing that some of the problem is at the top as well (Rick Wagoner makes 8.5 mil with bonuses totaling more than that each year), nothing is going to help.

Zoom
May 30, 2008 at 3:52 p.m.
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lakennedy,
To answer your last question about whether the buyouts will help, I think very little. While GM has a lot of cash, it is burning through it very fast. $2.1b per year won't be enough.

Zoom
May 30, 2008 at 3:49 p.m.
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Unfortunately, the cutting isn't done.
http://www.autonews.com/article/20080529...

billnewbie
May 30, 2008 at 3:44 p.m.
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nictre:
Whether the seniors are responsible for the two tier system is irrelevant, even though it heavily favors them, and it most certainly had the support of a great many of them or it could not have passed. Eventually "the worm will turn" and the juniors will have the power to vote their own interest in spite of, and at the expense of the seniors.

lakennedy
May 30, 2008 at 3:44 p.m.
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Sorry, Billnewbie. I didn't know that.

billnewbie
May 30, 2008 at 3:38 p.m.
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lakennedy:
I was refering to a comment made about jackson by gstrube which has since been removed.

nictre
May 30, 2008 at 3:31 p.m.
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billnewbie: I was a senior worker for GM. I voted down the contract as did many of the senior workers. The "temps", who were eventually hired as permanent workers after 1 year of service, put the contract over in GM's
favor. Hence, they will be the first laid off,
if not already laid off. So, don't say that the senior workers put the two-tier contract into existence. I spoke to many temps, now permanent workers. They were so excited to be permanent workers that they voted the contract in. No matter how many of us seniors would tell them that the contract is no good and the 2-tier is not fair to anyone coming up behind them. The majority of them are very young and do not know a thing about the consequences of what was done with the voting of this contract into existence. But, they will find out soon enough.

Zoom
May 30, 2008 at 3:27 p.m.
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GM will save an estimated $2.1 billion per year by not replacing 15,000 departing workers.
http://www.thetruthaboutcars.com/gm-buyo...

lakennedy
May 30, 2008 at 3:26 p.m.
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billnewbie--I do not agree with Jackson at all, but he's not in any trouble for libel. His idiotic rantings would clearly be viewed as opinon, and no one was specifically identified.

Anyways, I was just wondering if anyone has anything to write about the actual article, and not just on Jackson? Does anyone think that these buyouts will help the future of GM?

Zoom
May 30, 2008 at 3:16 p.m.
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jackson's single comment generates 12 more (and counting). You people are suckers.

billnewbie
May 30, 2008 at 2:48 p.m.
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What you said about jackson is libel unless you can prove it. You might want to consider retracting that statement quickly.

lifeafter
May 30, 2008 at 2:44 p.m.
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I agree, MYYEAR08. I love how some people think that everyone who works at GM is uneducated. I work at General Motors and will be one of the people that will be laid off in July. However, I have medical schooling and worked in the medical field for years before I became employed at GM. So, I wont be flipping burgers.

RUSerious
May 30, 2008 at 2:42 p.m.
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Myyear08: You are correct-and he should stop making them before he doesn't have a friend left in Gazettextraland.

localboysince1968
May 30, 2008 at 2:39 p.m.
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gstrube - ah, now that explains jackson1's disparaging attitude.

MYYEAR08
May 30, 2008 at 2:19 p.m.
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The Jackson comments are getting a little out of control !

gstrube
May 30, 2008 at 1:59 p.m.
(This comment was removed by the site staff.)
localboysince1968
May 30, 2008 at 1:56 p.m.
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Jackson1 - I believe the GM workers can spell and use grammer better than you can! I am sure it is tough if you never made it past the 8th grade.......You sound like a disguntled ex-spouse of a GM worker, or somebody who was shunned by the auto company. I am sure you serve these fine local economy contributors we call GM workers everyday at lunch time.

etowntomilton
May 30, 2008 at 1:46 p.m.
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Jackson tried working at GM as summer help but couldn't make it through one night.

leostime36
May 30, 2008 at 1:18 p.m.
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Jackson1, have you worked at GM? I can't imagine this coming from someone who HASN'T worked there (this is where you would spell it "their" :>)

RMaN4
May 30, 2008 at 1:15 p.m.
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How is having GM works as your next door neighbors working out for you jackson1?

cocktail848
May 30, 2008 at 1:12 p.m.
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Well Jackson, I doubt they will fill out any apps for Burger World. They wouldn't want to work with you. In addition, they have more skills from working on the line then you do at Burger World. I also find it funny that you don't even refer to the CEO of the world's second largest auto maker by name. Shows how educated you are on the topic of the auto industry since he has been in the press quite a bit lately. Go to Wikipedia and look up his name so you have it next time.

overdone
May 30, 2008 at 12:48 p.m.
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jackson, get a education, it is their, not there.

RMaN4
May 30, 2008 at 12:24 p.m.
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Wagonners salary and stock options would scare us... I don't see him, or the other high - ups in Detroit taking pay cuts...

localboysince1968
May 30, 2008 at 12:18 p.m.
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Either the Puma hall or Renaissance Center. If the burden is to be carried by the hourly workers, it must be carried all the way to the top floor. That is only fair. The only way this is to begin is to place a seat on the board for the Union.

RMaN4
May 30, 2008 at 12:10 p.m.
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Maybe some of the higher-ups that reside in Puma hall have some answers....

billnewbie
May 30, 2008 at 11:51 a.m.
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The company and the union have agreed to a 2 tier pay scale which is unfair to the youngsters that are and soon will be working for GM. The senior workers have decided that their pay and benefits are more important than that of their junior counterparts and since they are the majority, they can force this on the junior members of their union rather than share the load of reduced wages for everyone. In the future, when the juniors are a majority, the seniors may well lose a great deal of the benefits they have protected for themselves as the new majority decides to turn the tables and take more for themselves as the precedent has now been set to allow. If you listen carefully, you can almost hear the weeping and gnashing of teeth that will occur when the juniors flex their new power about 10 years or so from now at the expense of the seniors.

localboysince1968
May 30, 2008 at 10:58 a.m.
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Unfortunately, Janesville only hears about the bad apples in the bunch. Nobody ever talks about the hard working people at GM Janesville. If nobody worked hard, how could 1200 trucks get built a day? Every business or company has a percentage of workers who have a drinking problem, drug problem, or absenteeism issue to some degree. But, with the law of percentages, with GM Janesvilles employment numbers, you will see a greater number of individuals with these issues. It doesn't mean that only people with those problems work at GM, it means that people only hear about those individuals and not the hard workers. What magnifies the situation is when the Union will protect those individuals at the expense of the good individuals, which creates anamosity amoung those who see it happen. It is that anamosity that gets the word spread about those troubled individuals. Remember; A person has a good experience, he will tell one individual. If a person has a bad experience, he will tell 14.

Opinionsforfree
May 30, 2008 at 10:53 a.m.
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I am going to sit this one out. I've made my points

Zoom
May 30, 2008 at 10:42 a.m.
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I've never said anything bad about GM workers, just GM as a company and the products they build. Please don't lump me in with jackson, the resident troll.

Why the complaining about the complaining?

acejd93
May 30, 2008 at 10:10 a.m.
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Oh goody, more news about GM. Dind Ding Ding, Let the drama begin. I enjoy reading the entertaining comments about the supposed uneducated whiners that work there but I think it's the whiners here that are uneducated on what goes on at GM Janesville. Might as well start off topic, also, because by the end of all the blogs, people are on other topics and complaints that have no relivance to the original story. The same ol people are always the ones complaining too, You know who you are, Jackson, Zoom, Opinions, Mom, and others. Perhaps I should speak for everyone at the plant since we're uneducated and too drunk to turn on a computer, and the ones who choose not to get involved in your bickering, GET A LIFE! Karma will catch up to you someday.

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