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GM, Chrysler Offer New Rounds of Buyouts to UAW

February 3, 2009
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General Motors joined Chrysler on Monday, February 2, in offering a new round of hourly worker buyouts and retirement incentives to cope with the industry downturn and meet federal labor-saving requirements for the automakers’ rescue package.

Chrysler and GM notified United Auto Workers locals of the plan Monday, said two union sources who asked not to be identified. Automotive News, which Monday first reported the Chrysler buyout plan, obtained a copy of the Chrysler notice.

GM spokesman Tony Sapienza declined to comment on the matter.

Chrysler confirmed the buyouts Monday afternoon. In a statement, the company said workers have until February 25 to elect to leave.

“Given the difficult economic and market conditions in the U.S., Chrysler LLC determined in December 2008 that it would offer another phase of special programs,” the statement said.

Chrysler and GM want to move veteran workers off their rolls to eventually bring on hires who will earn half the $28-an-hour wage of current veteran workers and half their benefits. Chrysler employs about 38,000 workers represented by the UAW, while GM employs 71,000.

Chrysler also must bring its labor costs in line with Japanese transplant automakers by February 17. That’s when the automaker is required to justify a federal rescue loan of $4 billion. General Motors has the same timeline to justify a federal loan commitment of $13.4 billion.

UAW spokeswoman Christine Moroski declined to comment.

Chrysler’s incentives are more generous than those offered by GM. Retirement-eligible Chrysler workers who leave will receive a $50,000 incentive plus a voucher of $25,000 for a new Chrysler vehicle, according to the notice. Last year the incentive was $70,000.

GM hourly workers who retire are eligible for $20,000 in cash and a $25,000 car voucher, according to a UAW source. About 18,000 GM hourly workers took larger buyout incentives in 2008 to leave the company.

Chrysler workers who take a buyout and leave with no retiree health care benefits get $75,000 and a $25,000 car voucher, the union source said. The incentive was $100,000 last year. GM buyouts offer $20,000 and a $25,000 car voucher.

Another group now is eligible for full retirement benefits at both automakers: workers 55 or older with 10 years of service, according to the sources.

Filed by Robert Sherefkin and David Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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