General Motors (NYSE: GM) will begin offering 5,200 employees buyout offers next month to make room for lower-priced workers as a result of its new UAW contract that was completed in October. All of the employees who will be offered buyouts are UAW factory floor workers, with the offers ranging from $35,000 to $140,000 -- very similar to buyout offers the automaker offered to employees in 2006. At the time those offers were given, about 34,400 employees (30% of GM's workforce) accepted them. With such dazzling success, it makes sense for the offer to spring up once again as GM continues to lower employee costs.Will GM CEO Rick Wagoner be able to catch up to foreign automakers with U.S. operations that have a significantly lower labor costs? It will help, but it won't do the job completely. GM will likely be joining all automakers next year in a selling and production slowdown that necessitates more labor cost cut planning right now.
There is no word on how much this new round of buyout offers will cost the Detroit automaker, but the company did say that the newer buyout offers will be offered to UAW employees at plants in Pittsburgh, Pennsylvania and Massena, New York, in addition to all 23 U.S. service and parts operations locations.
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