Dodge Nitro Forum banner

1 - 1 of 1 Posts

·
Super Moderator
Joined
·
23,877 Posts
Discussion Starter #1
U.S. Automakers Are Said to Near 10,000 UAW Buyouts


March 24 -- General Motors Corp., Chrysler LLC and Ford Motor Co. may get 10,100 United Auto Workers union members to accept buyouts after the elimination this year of benefits related to job security and unemployment pay.

GM may buy out 5,000 workers and Chrysler may shed about 3,000, said people familiar with the matter, who asked not to be identified because the programs aren’t complete. GM’s buyout, worth one-third as much as one earlier offer, finishes today and Chrysler’s ends March 27. Ford may get 2,100 to leave with an offer starting April 1, Barclays Capital estimates.

“There’s not as much pulling them out of their jobs this time, but there’s a lot pushing them out,” said Gary Chaison, a labor professor at Clark University in Worcester, Massachusetts. “There’s not a lot of job security left if they stay.”

GM, Ford and Chrysler are trying to get as many of their 132,600 UAW members as possible to leave to help cut labor costs to the level of non-union workers at Japanese-owned U.S. plants. The union agreed in 2007 to let automakers slash retirement benefits for new hires and pay them half as much as current employees.

GM and Chrysler, which lost a combined $39 billion in 2008, need the savings to keep $17.4 billion in U.S. loans and make the case to borrow $21.6 billion more. President Barack Obama’s auto task force has set a March 31 deadline for progress in restructuring plans.

UAW Accords

Spokesmen for Detroit-based GM, Chrysler and the UAW declined to comment on the progress on buyouts. The UAW announced tentative agreements on contract changes, including buyout terms, for Ford, GM and Chrysler on Feb. 17 without giving details.

GM fell 27 cents, or 8 percent, to $3.08 at 9:37 a.m. in New York Stock Exchange composite trading, while Ford dropped 11 cents, or 3.8 percent, to $2.79.

Union workers at Ford, which isn’t seeking government loans, ratified changes March 9 after reaching an accord on a plan to replace as much as half of future payments to a UAW-run retiree health-care fund with stock instead of cash. GM and Chrysler are still negotiating retiree-fund changes.

The Ford UAW concessions get rid of the so-called jobs bank that paid workers most of their wages to come to a work location when there were no duties to perform. Pay that supplements unemployment has been chopped. Laid-off employees who refuse to take a new job, even hundreds of miles away, lose their benefits.

‘Very Sad’

“If they do stay, the jobs they keep won’t be anything like what they enjoyed 10, 12 years ago,” Chaison said. “The good jobs are gone or going fast and they know it. It’s very sad.”

The UAW-GM accord makes similar economic concessions to the one ratified by Ford’s union members, UAW Vice President Cal Rapson wrote in a March 9 letter to local presidents and chairmen.

The GM buyout program covers about 62,000 workers willing to retire or quit and consists of a $25,000 voucher to buy a new auto and $20,000 in cash. GM has 22,000 workers eligible to retire and is seeking to get as many as half of them to leave, people familiar with the plans said last month. Employees who accept the buyout today still have seven days to reconsider.

Less Cash

Two previous plans provided more money. GM enticed 34,400 union members to leave in 2006 with packages of as much as $140,000, and used pension funds to help pay as much as $62,500 to get 18,000 UAW members to leave in 2008.

Cerberus Capital Management LP’s Chrysler is offering cash and a vehicle voucher with a combined value of as much as $75,000 to its 28,600 UAW workers. The Auburn Hills, Michigan- based automaker granted buyouts of as much as $100,000 last year when 13,200 union workers left.

Ford workers can get as much as $75,000 in cash and vouchers, depending on their skill level and retirement eligibility. The offer will end May 22. About 41,000 UAW members have taken Ford buyouts in the past three years, with offers of as much as $140,000 in 2008.

“There are a lot of people who are burned out, kind of sick of it,” said Dave Lipsky, a labor professor at Cornell University in Ithaca, New York. “The constant barrage of bad economic news makes people want to go away and hide. This may be the last buyout opportunities for some of these workers.”

Analyst’s Estimate

Ford may get 5 percent of its current 42,000 UAW members to leave, or about 2,100, Barclays analyst Brian Johnson in Chicago wrote in a March 12 report. Using the same methodology, Johnson estimated GM would get about 3,100 workers to leave.

About 10,000 workers among the three automakers may be an accurate estimate of the number who will leave, said Sean McAlinden, a labor analyst at the Center for Automotive Research in Ann Arbor, Michigan. More than 125,000 UAW members, including union workers at auto-parts suppliers, have taken buyouts since 2005, he said.

Ford’s new agreement lets it dismiss workers who reject a transfer to a new factory, compared with a previous labor accord that didn’t put employees’ jobs at risk until they had turned down two transfers.

“From a longer-term impact, this is one of the most important parts of this agreement,” Joe Hinrichs, Ford group vice president of manufacturing and labor affairs, said in a March 11 interview. “It caps that liability and puts a finite piece of time an excess employee can get paid. It forces a decision on a job.”

He declined to reveal a goal for Ford’s current buyout offer. “We’ll take as many people who want to go,” he said.

LINK:U.S. Automakers Are Said to Near 10,000 UAW Buyouts (Update1) - Bloomberg.com
 
1 - 1 of 1 Posts
Top