GM, the UAW and Delphi Reach Agreement on Accelerated Attrition Program


DETROIT - General Motors Corp. (NYSE: GM), the United Auto Workers union and Delphi Corp. have reached an agreement to reduce the number of U.S. hourly employees through an accelerated attrition program. The agreement, which is an important contributor to GM's turnaround plan in North America, is subject to approval of Delphi's participation by the Bankruptcy Court.

The program is expected to be offered to U.S. hourly employees at GM and select UAW-represented members of Delphi's hourly work force. It will include a combination of early retirement incentives and other considerations to help reduce employment levels at both GM and Delphi in a manner that benefits both eligible employees and the companies.

"When we announced the capacity rationalization and employment reduction plan late last year, we said we'd be working with UAW leadership to develop an accelerated attrition program that would help us achieve needed cost reductions as rapidly as possible, while at the same time responding to the needs of our employees," said GM Chairman and Chief Executive Officer Rick Wagoner. "We are pleased that this agreement will help fulfill that important objective. In addition, the agreement will enhance the prospects for GM, the UAW, and Delphi to reach a broad-based consensual resolution of the Delphi restructuring."

The program will be offered to all GM hourly employees, but overall acceptance rates will depend on individual employee decisions. The program also permits the flow of UAW-represented Delphi employees back to GM until September 2007. In addition, eligible UAW-represented Delphi employees may elect to retire from Delphi or flow back to GM and retire.

Under the agreement, GM has agreed to assume the financial obligations related to the lump sum payments to be made to eligible Delphi U.S. hourly employees accepting normal or voluntary retirement incentives and certain post-retirement employee benefit obligations related to Delphi employees who flow back to GM under the plan. GM expects to record the cost associated with the attrition program in 2006. The cost will be incurred as employees agree to participate.

General Motors Corp. (NYSE: GM), the world's largest automaker, has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one of the world's leading finance companies, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com.

More info:

GM offers workers up to $140K to leave
Severance packages available to 113,000 workers; deal also reached with Delphi to avoid labor dispute.
By Chris Isidore, CNNMoney senior writer
March 22, 2006: 10:08 AM EST

NEW YORK (CNNMoney.com) - General Motors Corp. is offering its hourly workers as much as $140,000 each to leave the company as the embattled automaker made its latest effort to cut labor costs and end billions of dollars in losses.

GM announced an agreement with the United Auto Workers union Wednesday, although it did not give the details of the offer being made to all 113,000 U.S. hourly employees. But a source familiar with terms of the offer confirms those UAW members with 10 years or more service with the automaker will get $140,000 if they agree to forsake the retiree health care coverage that has become a crippling burden for GM.

Those with less than 10 years service time will get $70,000 if they leave without the health care coverage.

The company also announced a much anticipated agreement Wednesday with bankrupt auto parts maker Delphi and the United Auto Workers that is seen as a key to avoiding a crippling strike at that key supplier.

GM (Research) will pay certain Delphi employees $35,000 to retire early and offer jobs at GM to 5,000 Delphi employees, according to a statement from Delphi (Research). GM hourly employees who are eligible for retirement are also being offered $35,000 to retire early.

GM has job guarantees with the UAW members that run through September 2007, but it announced plans in November to close a dozen plants and facilities and trim 30,000 hourly jobs in North America.

"We said we'd be working with UAW leadership to develop an accelerated attrition program that would help us achieve needed cost reductions as rapidly as possible, while at the same time responding to the needs of our employees," said a statement from GM Chairman and CEO Rick Wagoner. "We are pleased that this agreement will help fulfill that important objective."

GM lost $10.6 billion in 2005 and its executives have not said when they expect it to return to profitability. They have said an agreement with Delphi as well as an agreement with the UAW to cut its own labor costs were keys to that return to black ink.

GM also has contract obligations to the union members at Delphi, which it spun off in 1999. It said those costs could have gone as high as $12 billion, though last week it said the cost would likely be closer to the $5.5 billion pre-tax charge it took in the fourth quarter.

GM announced Wednesday it will take additional charges this year as part of the new offer.

Besides those contract obligations, GM had an incentive to help Delphi trim its labor costs to avoid a potentially crippling strike by the union at the parts maker, which is still GM's largest supplier. Delphi executives had demanded deep concessions from the union and set a March 30 deadline for a cost-cutting deal, threatening to go to the bankruptcy court to have its labor deals thrown out without an agreement. The union had threatened a strike if Delphi had taken that step.

"An accelerated attrition plan will help enable the transformation of our U.S. manufacturing and support operations into a much more competitive cost base," said a statement from Delphi Chief Operating Officer Rodney O'Neal.

Delphi said that it will continue talks in an effort to achieve a comprehensive agreement with the UAW and other unions at Delphi. But the three-way agreement is generally seen as clearing way for those new labor pacts.

It will present the agreement with GM and the UAW on the early retirement and the return of 5,000 UAW members to the autoworker to the bankruptcy court on April 7.

http://money.cnn.com/2006/03/22/news/companies/gm_delphi/index.htm?cnn=yes

oh to get laid off like that!