GM will lay off more workers after buyout falls short

GM wanted 13,500 of its workers to voluntarily walk away from their jobs as part of its bankruptcy and restructuring.  It failed to get even half of that number to take the golden parachutes the automaker offered, which means that the auto company Barack Obama bought will have to lay off over 7500 people by the end of the year.  By 2012, that number will grow by another 9,000:

About 6,000 General Motors Co. blue-collar workers have taken the latest round of early retirement and buyout offers, but it fell short of the company’s goal, meaning more layoffs are likely.

GM has about 54,000 factory workers and wants to end the year with 40,500, a cut of about 13,500. Monday’s report means that about 7,500 too few workers took the offers, setting the stage for more layoffs.

The automaker announced in June and July that it would close 15 U.S. factories employing about 22,000 workers by end of 2012. …

Sixty-five percent of the workers took early retirement packages, while about 30 percent took buyouts, with the remainder taking incentives allowing them to retire before they are eligible, the company said. About 40 percent of the 6,000 were skilled trades workers, with the remainder coming from the production work force.

Considering the circumstances, the packages weren’t bad.  Production workers got $20,000 and a $25,000 car voucher to quit now; skilled workers got the voucher and $45,000.  Those with ten and twenty years of experience got bonuses up to $115,000 for the cash buyout.

GM considers this a success, and actually they may be right.  In this economy, it would be difficult to talk anyone out of a job, since prospects of replacing it seem pretty poor for the next several months.  Getting 6,000 people to do so is impressive, although they had a tough choice in front of them.  Either they take the bailout package now or risk winding up with nothing at all in a few months.

Politically, though, this is a problem for the administration.  At some point, “Government Motors” will begin layoffs, and the anger these furloughs generate will cause more and more problems for Democrats in Michigan and Washington.  After all, had the administration allowed for a normal bankruptcy, the result would have been the same for these workers, only it wouldn’t have cost taxpayers tens of billions of dollars to subsidize it.  The White House sold their “political bankruptcy” as a means to lessen the blow to line workers, but over 22,000 will get the axe anyway, in one manner or another, during Obama’s first term.

How are the workers faring at Ford these days?

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