Nearly 50,000 take buyouts at GM, Delphi

updated 8:57 p.m. ET June 26, 2006

DETROIT - About 47,600 hourly workers have decided to leave General Motors Corp. and Delphi Corp. through buyout or early retirement offers, accelerating the distressed companies’ plans to cut costs by paring their work forces.

At GM, where about 35,000 people will depart — mostly through early retirements — Chairman and CEO Rick Wagoner said he was surprised by the numbers. But he said the number of takers will allow the Detroit company to reach its target reduction of 30,000 manufacturing jobs by Jan. 1, two years ahead of schedule.

GM previously announced plans to cut its 113,000-person U.S. hourly work force by 30,000, closing a dozen plants by 2008.

“Over the past several months, we have accomplished a great deal in our strategy to reshape GM into a company that is more nimble, more global and built for long-term success,” Wagoner said Monday.

The deadline for GM workers to file paperwork for the offers was Friday, but they have seven days to change their minds. Friday also was the deadline for workers at Delphi, GM’s former parts operation that is now a separate company, to file for early retirement incentives.

Delphi said Monday that about 12,600 employees represented by the United Auto Workers union took early retirement offers at the Troy-based automotive parts supplier, which filed for bankruptcy protection last October. Some Delphi workers also have an additional buyout offer on the table with deadlines that are more than a month away.

Based on preliminary numbers from GM, about 4,600 employees accepted buyouts and about 30,400 chose to retire. It is expected that most will retire or leave the company by the end of the year, GM said. Delphi did not break out how many workers took each option.

GM offered buyouts of $140,000 for workers with at least 10 years of service, while those with less than 10 years would receive $70,000. The workers would cut nearly all ties with the company except for vested pension benefits.

The automaker also offered an early retirement option to workers with at least 26 years of service. Normally, employees can retire at 65 years of age or 30 years of service.

Delphi workers were offered similar buyout deals. But the Delphi offers still need a bankruptcy judge’s approval.

The nation’s No. 1 automaker said it expects to save $5 billion in structural costs in 2006, with a substantial portion coming due to the buyouts and retirements.

Wagoner said the exodus will allow GM to dramatically reduce the number of workers in the “jobs bank,” where laid-off workers get most of their pay and benefits even when they’re not working.

“That’s an important part of what we’re doing here,” he said.

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