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GM Takes Largest Step Towards Profitability Yet

47,600 Hourly Workers Leave GM

In the largest change thus far at GM, 47,600 hourly workers have agreed to walk away from the worlds largest automaker; a process that will take five months to finalize. Accepting offers of early retirement, severance, and buyouts, the mass exodus represents the most drastic attempt made to regain profitability by General Motors, which has posted catastrophic losses in recent quarters.

Throughout this year, GM CEO Rick Wagoner has been campaigning an accelerated recovery program for the auto giant, already announcing a personal pay cut (which was later revealed to be less effective than statements communicated), and various plant closures throughout the hemorrhaging North American market. Trying to recover from seemingly insurmountable $10.6 billion 2005

Amid all the doom and gloom, the GM factory producing the Solstice (among other cars) recently added a second shift to meet demand. (Photo: General Motors)

losses, the 47,600 workers were offered either early retirement with benefits or a buyout option that paid out between $70,000 and $140,000 depending on years of service. A total of 30,400 workers opted for early retirement while 4,600 took the lump sum. Of those workers who will walk, 12,600 are from Delphi while the other 35,000 are from GM.

And those numbers are vastly higher than expected; early estimates placed the numbers of those who would quit somewhere between 20,000 and 25,000. The success of the buyout means Wagoner has met the goal of cutting 30,000 jobs from GMs North American operation

Even though GM is closing or idling a dozen plants across North America, they are expanding with a new facility in Lansing. (Photo: General Motors)

by 2008, a full two years early. Additionally, the Delphi buyout could help stave off a potential Delphi strike GM has been fending off for months now. Removing that many jobs could help alleviate some of the pressure Delphi has been feeling since filing for bankruptcy last October, and help it negotiate a new contract with the auto workers union. As the former owner and current largest customer of Delphi, an auto parts supplier, GM has taken an active role in its labor negotiations and has already agreed to hire 5,000 employees away from Delphi.

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