Word: gm
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Dates: during 2000-2009
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...buyouts have been the chief topic of conversation in GM plants for the past couple of weeks. "I expect about 60% of the people are going to take it," says John Weizman, union member from UAW Local 653 in Pontiac. "I know I'm thinking about it," adds Weizman, who first signed on with GM in Dayton, Ohio, more than twenty years ago and has now moved four times as GM has downsized...
...GM says it is prepared to start offering buyouts to some workers as soon as next week, and it believes that 25% to 30% of its 126,000 eligible employees will eventually accept the packages. That means that over the next two years, the buyouts should enable GM to trim its hourly workforce in the U.S. - which approached 500,000 during the late 1970s - to around 80,000 or less, according to Sean McAlinden of the Center for Automotive Research in Ann Arbor, Michigan. In addition, the hourly payroll at Delphi, the supplier company GM spun off in 1999, could...
...Will the deal help turn around GM...
...buyouts certainly add a new sense of urgency to a turnaround effort that until now some critics, such as GM's newest board member, Jerry York, investor Kirk Kerkorian's man in Detroit, had considered stuck in neutral. But things are not looking up at GM these days. The automaker recently disclosed it had lost $10.6 billion in 2005, not $8.6 billion as the company reported in January. March sales estimates prepared by outside analysts suggest that GM's market share has dipped close to 21% in March, a far cry from the 45% GM commanded in its heyday...
...Ironically, while the buyout agreement could help cut GM's payroll, it could also end up exacerbating its other major problem, crippling employee retirement costs. John Murphy, the auto analyst for Merrill Lynch, warned in a note to investors, "The accelerated retirements at GM may result in a lower active headcount, but further exacerbates GM's already heavy burden of 2.5 retirees to active workers. Furthermore, GM continues to structurally shrink as it loses market share in the U.S., which means that a smaller company is supporting more retirees. Until GM stabilizes market share, rationalizes capacity at every point...