Blue-collar GM staffers take buyout en masse
jessica.lam | May 30, 2008 at 08:41 amby
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DETROIT–General Motors Corp said yesterday about 19,000 U.S. factory workers – more than a quarter of its American blue-collar work force – have taken buyout offers.GM is under increasing pressure to cut costs in the face of weak sales and high gas prices, and analysts said the automaker would have to quickly move beyond sweeping hourly job cuts by slashing production, eliminating white-collar jobs and trimming other costs.All of GM's roughly 74,000 U.S. factory workers had been eligible for early retirement packages and buyouts intended to clear the way for hires of lower-wage workers under a deal negotiated last year with the United Auto Workers union."Despite significant challenges in the U.S. market, we continue to reshape our business for long-term success," Troy Clarke, GM's president of North American operations, said in a statement.Like other Detroit-based automakers, GM has been hit hard by a U.S. market that has declined by a wider margin than expected and by a faster move by consumers away from gas-guzzling trucks and SUVs due to record gas prices.GM's U.S. sales have dropped by almost 12 per cent through April, a month that saw the industry's weakest sales in a decade. Analysts expect May sales to be as weak or weaker, with an even sharper drop in sales of more profitable trucks.The weakening market has prompted Ford Motor Co to prepare plans to cut white-collar jobs this summer and expectations are building that GM will use next week's annual meeting to unveil further cost-cutting steps."These restructuring plans look aggressive when they're announced, but it turns out that they're not aggressive enough," Argus Research analyst Kevin Tynan said.GM said most of the UAW-represented workers taking buyouts and early retirement offers, which ranged up to $140,000 in one-time payouts, would leave by July 1.
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