Thousands Of GM Employees Take Buyouts

June 27, 2006

A large number of hourly employees, 35,000, took GM up on its buyout program, placing GM ahead of its schedule to reach a 30,000 job reduction by Jan. 1, 2007. Approximately 4,600 of the employees accepted buyouts and 30,400 chose to retire.

"These moves have given us a fast start toward achieving our stated objective of reducing GM's global structural cost from approximately 34% of revenue in 2005, to 25% of revenue by 2010, and setting us up to be successful for years to come," said GM Chairman and CEO Rick Wagoner.

Employees who chose to leave the company will retire or leave no later than Jan. 1, 2007 and GM will use temporary employees as necessary while permanent replacements are put in place."All temporary, relocated, and Delphi flow-back workers will receive extensive training to maintain GM's safety leadership and strong quality performance," GM said.

Wagoner thanked the UAW in his statement; "We appreciate the UAW's steady support in working with us as we make the necessary moves to restructure GM North America for long-term success."

Workforce reduction is part of GM's overall North American turnaround plan. According to a company statement, other major actions taken towards this plan include, "the health-care agreement with the UAW and the IUE-CWA; the manufacturing capacity plan; changes to U.S. salaried health-care and pension plans; a complete overhaul of GM's marketing strategy; and accelerated launches of key new product entries and technologies."

About the Author

Adrienne Selko | Senior Editor

Focus: Workforce, Talent

Follow Me on Twitter: @ASelkoIW

Bio: Adrienne Selko has written about many topics over the 17 years she has been with the publication and currently focuses on workforce development strategies. Previously Adrienne was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck? which made the Cleveland Plain Dealer's best sellers list. She is also a senior editor at Material Handling & Logistics and EHS Today.

Editorial mission statement: Manufacturing is the enviable position of creating products, processes and policies that solve the world’s problems. When the industry stepped up to manufacture what was necessary to combat the pandemic, it revealed its true nature. My goal is to showcase the sector’s ability to address a broad range of workforce issues including technology, training, diversity & inclusion, with a goal of enticing future generations to join this amazing sector.

Why I find manufacturing interesting: On my first day working for a company that made medical equipment such as MRIs, I toured the plant floor. On every wall was a photo of a person, mostly children. I asked my supervisor why this was the case and he said that the work we do at this company has saved these people’s lives. “We never forget how important our work is and everyone’s contribution to that.” From that moment on I was hooked on manufacturing.

I have talked with many people in this field who have transformed their own career development to assist others. For example, companies are hiring those with disabilities, those previously incarcerated and other talent pools that have been underutilized. I have talked with leaders who have brought out the best in their workforce, as well as employees doing their best work while doing good for the world.