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General Motors (NYSE: GM) has convinced 6,000 of its UAW employees to take buyouts of their contracts, more than doubling Barclays Capital's estimates.The buyouts affect 10% of GM's UAW-represented workers and come at a steep cost: a $25,000 voucher to buy a new car and $20,000 in cash. Now it's not that I begrudge GM's hardworking employees who individually had nothing to do with the company's collapse, but I have to ask: Is it really fair to write them checks for $45,000, with payments made by the United States taxpayers who had nothing to do with GM's collapse.
It's not that different from the bonus scandal at American International Group (NYSE: AIG), except that those people were at least in some cases paid bonuses to stay. The United States is writing mid-five figure checks to GM employees to get them to stop working. Yes, the GM buyouts affect middle class blue collar workers instead of Wall Street hotshots but guess what? Many of the AIG employees weren't particularly wealthy either -- especially not if they had their money invested in the company they worked for.
The payment of bonuses at AIG and buyouts at GM is another example of why restructuring these companies outside of the bankruptcy court is such a complete ripoff to taxpayers. It provides unfair benefits to people who very likely could have been wiped out in a bankruptcy filing, and sticks innocent taxpayers with the bill. I mean think about it: Why the heck should you and I have to pay a GM worker $45,000 because he was earning a wage that is completely unrealistic in the global economy?
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Reader Comments (Page 2 of 2)
3-30-2009 @ 2:00AM
dano19582 said...
You realy need to look at your own wages and other peoples wages. You thing GM workers making $ 27.00 a hour is so out of hand and the people in those plants do not work hard enough for it well you all need to wake up. You and myself all had a chance to work for one of the BIG 3 and your choice was to work somewhere else maybe not making the same amount as a shop worker. Those jobs in those plants are not the same as they were 15 years ago. You earn that $ 27.00. When people finally are able to get out of those plants there bodies and there Health is so far down hill because of abuse on there jobs. The jobs are so over loaded now it's almost to much for you system and I have had 3-4 Doctors tell me this. I used to left weights and jog to keep up and now days after 32 years and at the age of 51 I have had 1 open heart surgery, 8 stints put into my heart, I have artritus so bad in my back and my shoulders and just 1 week ago just before I took this gM offer I had a heart attact in the parking lot of work. So do not say we do not earn the money we get paid. I could tell you of many more story's of workers passing away there right on the job's. You need to look at other peoples pay like state workers and goverment workers, I have a brother in-law that works for the state of mich doing laundrey for the preason's here and he get's paid $ 26.00 hour and he's got the same health care, same vacation time off and all most the same hollidays off. And the state of mich is one of the top states going brock but no one is saying anything about them. You all need to stop this crap and start looking at your self's.
3-30-2009 @ 3:20AM
TOD1007 said...
I WORKED 30 YEARS FOR GM, AND IT REALLY PISSES ME OFF TO HEAR PEOPLE TALK ABOUT THE AUTO WORKER NOT DOING ANYTHING, NOONE KNOWS HOW HARD THE MOST OF US WORK,THERE ARE SOME THAT DONT WORK BECAUSE THEY HAVE SOMEONE IN THE COMPANY THAT TAKES CARE OF THEM OR THEIR RIGHTS ARE BEING INFRINGED UPON. THAN THE PEOPLE THAT DOES WORK HAVE TO WORK HARDER TO MAKE UP FOR THEM.I AM SURE THAT IS THE PROBLEM WITHIN ANY JOB OUT THERE. OH BY THE WAY WHEN I RETIRED I HAD A BAD BACK BAD LUNGS, ARTHRITIS. BUT I ALSO HAD CHILDREN TO TAKE CARE NEVER WAS ON WELFARE. I EARNED MY MONEY MANY TIMES OVER.
3-30-2009 @ 6:39AM
Jt said...
Isn't the real problem that the company doesn't make cars people want to buy?
4-20-2009 @ 7:27PM
Tim said...
General Motors Corp.’s U.S. pension funds went from a $20-billion surplus at the end of 2007 to a $12.4-billion deficit 12 months later.
Newly released numbers show that the funds, which help support more than 650,000 Americans, were tapped for billions of dollars over the past year for employee buyout programs, benefit increases and as part of the UAW’s retiree health care trust deal.
This is a pension that we worked very hard to contribute to. The government did not pay for the buy outs, our pension money did. Although your report seems to make better news, to bad it is not accurate.