Deal is in sight for GM's plan to cut jobs

GM workers said they are eager to hear about the buyout package.
KNIGHT RIDDER NEWSPAPERS
DETROIT -- General Motors Corp., Delphi Corp. and the UAW are close to an agreement on a massive job-cutting plan to offer retirement packages to thousands of blue-collar workers, a pact that would help the struggling automaker avert a crippling strike at the auto parts supplier, sources familiar with the talks said Friday.
GM and the UAW are expected to announce details of the package, which could spur one of the largest exoduses of people from the automaker, as early as today.
The deal would help GM accelerate its efforts to cut 30,000 jobs across North America by the end of 2008, including 25,000 in the United States.
It also would move the automaker and the union closer to a deal on a bailout package for Delphi that would avert a strike there, the sources said.
GM also indicated Friday that it hopes to persuade the UAW to modify the jobs bank program, part of the union contract under which hourly workers are paid nearly full wages and benefits even when their plant has been idled or closed.
GM's board of directors held an unscheduled conference call Friday to discuss the costs of the buyouts, one person familiar with the board said.
GM losses
The board meeting came a day after GM said it lost $10.6 billion last year -- $2 billion more than it reported in January -- mostly because of higher costs related to Delphi and the automaker's plans to idle a dozen plants.
The losses, coupled with GM's announcement that it would delay filing its annual financial report with the U.S. Securities and Exchange Commission for as long as two weeks, sent the automaker's shares down sharply. GM shares closed down $1.09, or 4.9 percent, at $21.13 on the New York Stock Exchange.
GM has continually cut its U.S. blue-collar work force. At the end of 2005, GM had 105,000 hourly workers in the United States, down from 133,000 in 2000.
About 40,000 of those hourly workers are eligible to retire, and many could be persuaded to leave with a check in hand.
Jobs bank
Falling vehicle sales have left GM with an excess of workers. It has about 8,000 U.S. workers in the jobs bank, and the early-retirement offer could help clear it out.
GM executives have said that the jobs bank puts the company at a competitive disadvantage because it's a cost that foreign automakers don't bear.
The executives have hinted that the jobs bank could be eliminated or the benefits reduced, and GM affirmed that view in a regulatory filing Friday.
"GM believes it is likely that the jobs bank provisions will be modified," after the current contract expires in September 2007, the automaker said.
GM declined to comment further.
UAW President Ron Gettelfinger has said in the past that the jobs bank won't be eliminated.
GM hourly workers said they were eager to hear details of the buyout package.
"I've been praying and hoping for this for a long time," said John Krzanowsky, 53, who has worked 34 years at GM's metal fabrication plant in Lordstown.
He said many co-workers also are eager to get out. Many would like to retire, he said, but are afraid they won't be able to afford the higher health-care costs for retirees, a concession that the UAW agreed to with GM last year.
Compared to Ford
Workers said they hoped the early-retirement package offered by GM would be better than the incentives that Ford Motor Co. has offered workers at select plants across the country.
Ford offered some workers five different separation packages, three aimed at older workers. One package offers Ford workers with more than 30 years service and who are at least 55 a check for $35,000 to retire with full pension and health-care benefits.
Some workers said it would take more than that to encourage enough GM workers to retire.
"I think it will be attractive enough for some people to take it, but I doubt it'll be big enough at first for everyone to jump on it like white on rice," said Richard Incrocci, a GM assembly line worker in Arlington, Texas.
The retirement package also would free up jobs to allow some Delphi workers to return or flow back to GM, the parent company of the automotive parts supplier before a 1999 spinoff.
Delphi, which filed for bankruptcy protection Oct. 8, has said it will ask a New York bankruptcy court to void its labor contracts unless it gets the UAW to agree to a new contract.
The UAW has warned that voiding the contracts would trigger a strike, a move that would quickly shut down GM plants.
GM is eager to avoid a strike at its largest automotive parts supplier. The automaker is liable for many of the pension and retirement health-care benefits of Delphi workers in the event of a bankruptcy.
UAW Vice President Dick Shoemaker told local union leaders from across the country in Detroit this week that talks of a settlement involving Delphi and GM were progressing.
But a deal with Delphi won't be done before the end of the month, he said.