Detroit – General Motors agreed Wednesday to the biggest buyout of hourly workers in corporate history, paving the way for the world’s No. 1 automaker to dramatically shrink its U.S. operations and speed its return to profitability.
After days of marathon negotiations, GM struck an unprecedented deal with the United Auto Workers to offer retirement packages and buyouts to all of its 113,000 hourly workforce and most of its former workers now employed at bankrupt Delphi Corp.
By offering a wide range of retirement and buyout options, GM can move in earnest toward its goal of cutting 30,000 manufacturing jobs and shutting six assembly plants by 2008.
“This offers a road map for the future at GM and increases the odds considerably that the company will survive going forward,” said David Cole of the Center for Automotive Research in Ann Arbor, Mich.
Retirement offers to more than half of Delphi’s 24,000 UAW-represented workers also could help ward off the threat of a strike at the troubled auto- parts maker as it reorganizes in bankruptcy court.
GM chairman Rick Wagoner said the “accelerated attrition program” will allow GM to “achieve needed cost reductions as rapidly as possible,” while slashing production capacity to match its dwindling U.S. market share.
Wagoner added that the deal will enhance the prospects that Delphi can be radically restructured without a crippling labor war.
