DETROIT -- General Motors Corp. said about 19,000 hourly workers have accepted buyout or early-retirement offers from the company and most will leave its payroll by July 1.
The move will cut the auto maker's U.S. hourly work force by about 24%, and it comes as GM is preparing a number of additional cost-cutting moves to be announced next week at its annual shareholder meeting. The 19,000 acceptances met the company's expectations, a person familiar with the numbers said.
GM is considering idling at least one plant as part of a package it hopes to outline for shareholders, according to people familiar with the matter. The measures are aimed at conserving cash amid a deep slump in sales of trucks and sports-utility vehicles. GM is also likely to announce it will discontinue certain model lines, these people said.
Under the terms of its labor contract with the United Auto Workers, GM can't permanently close U.S. plants, but the company can idle plants by halting production of slow-selling or unprofitable models. Workers at idled plants are paid nearly full wages and benefits.
GM recently announced shift cuts at four North American truck and SUV plants in response to a rapid deterioration in demand for such vehicles.
The new round of buyouts and early retirements means about 53,000 workers -- roughly half its hourly work force -- have agreed to leave the company since the beginning of 2006.
The auto maker designed the recent attrition packages to appeal particularly to workers with 26 or more years of service, making them eligible to retire. The majority of people opting to accept the offer fell into that camp, this person said.
Rivals Ford Motor Corp. and Chrysler also conducted attrition programs this year. Together, they attracted only about half as many commitments. Ford is opening yet another buyout program, which offers packages to employees on a plant-by-plant basis.
GM will spell out the cost of the attrition plan this year, a spokesman said. GM's prior plan resulted in a $6.4 billion charge taken in 2006, and it was touted as a key cog in the company's ability to shave $9 billion in annual structural costs starting that year.
Mired in red ink and running through cash at a steady pace, GM hopes this latest attrition plan will help it save as much as an additional $5 billion in costs by 2011. The plan helps GM cut costs not only by removing workers who take home about $78 an hour in total compensation but by opening the door for new workers who will earn about one-third of what the departing workers made.
GM has earmarked about 16,000 of its factory jobs as eligible for this so-called second-tier wage rate. In a press release, GM said it will fill job openings with current employees wherever possible and turn to new hires only in cases where there is a deficit of workers.
GM Sheds 19,000 Jobs
DETROIT -- General Motors Corp. said about 19,000 hourly workers have accepted buyout or early-retirement offers from the company and most will leave its payroll by July 1.
The move will cut the auto maker's U.S. hourly work force by about 24%, and it comes as GM is preparing a number of additional cost-cutting moves to be announced next week at its annual shareholder meeting. The 19,000 acceptances met the company's expectations, a person familiar with the numbers said.
GM is considering idling at least one plant as part of a package it hopes to outline for shareholders, according to people familiar with the matter. The measures are aimed at conserving cash amid a deep slump in sales of trucks and sports-utility vehicles. GM is also likely to announce it will discontinue certain model lines, these people said.
Under the terms of its labor contract with the United Auto Workers, GM can't permanently close U.S. plants, but the company can idle plants by halting production of slow-selling or unprofitable models. Workers at idled plants are paid nearly full wages and benefits.
GM recently announced shift cuts at four North American truck and SUV plants in response to a rapid deterioration in demand for such vehicles.
The new round of buyouts and early retirements means about 53,000 workers -- roughly half its hourly work force -- have agreed to leave the company since the beginning of 2006.
The auto maker designed the recent attrition packages to appeal particularly to workers with 26 or more years of service, making them eligible to retire. The majority of people opting to accept the offer fell into that camp, this person said.
Rivals Ford Motor Corp. and Chrysler also conducted attrition programs this year. Together, they attracted only about half as many commitments. Ford is opening yet another buyout program, which offers packages to employees on a plant-by-plant basis.
GM will spell out the cost of the attrition plan this year, a spokesman said. GM's prior plan resulted in a $6.4 billion charge taken in 2006, and it was touted as a key cog in the company's ability to shave $9 billion in annual structural costs starting that year.
Mired in red ink and running through cash at a steady pace, GM hopes this latest attrition plan will help it save as much as an additional $5 billion in costs by 2011. The plan helps GM cut costs not only by removing workers who take home about $78 an hour in total compensation but by opening the door for new workers who will earn about one-third of what the departing workers made.
GM has earmarked about 16,000 of its factory jobs as eligible for this so-called second-tier wage rate. In a press release, GM said it will fill job openings with current employees wherever possible and turn to new hires only in cases where there is a deficit of workers.
