February 3, 2009 at 12:32 pm

Chrysler, GM offer new UAW buyouts

Packages for hourly workers presented in return for federal aid.

General Motors Corp. and Chrysler LLC are offering another round of buyout and early retirement packages to their 89,000 combined hourly workers -- a move that will help the automakers shed higher-paid employees to meet conditions for more competitive wages in return for federal assistance.

Details on the offers came a day before automakers announce January auto sales, and as GM and Chrysler try to cut costs and trim debt to comply with the requirements of their federal loan packages.

The United Auto Workers confirmed that the automakers have offered packages that include combinations of cash and new-vehicle vouchers.

Chrysler spokeswoman Mary Beth Halprin would not say how many of the 26,801 hourly workers are expected to take a package.

GM spokesman Tony Sapienza declined comment. The automaker has about 62,000 hourly workers in the U.S., and its restructuring plan includes eliminating up to 31,000 hourly and salaried employees from its 96,000-member work force by 2012.

Ford Motor Co. has "no plans at this time to offer buyouts to our hourly work force," said spokeswoman Marcey Evans.

Under the terms of the collective bargaining agreement reached in 2007 with the UAW, new hires receive $14 an hour, about half the wage of current workers, as well as less-extensive benefits. That helps heed government calls to bring GM and Chrysler wages on par with those paid by foreign automakers at nonunion plants in the U.S.

The conditions are attached to the $13.4 billion in loans for GM, as well as the $4 billion in loans Chrysler has been granted and the $3 billion it still seeks. The automakers must submit viability plans to the Treasury Department by Feb. 17.

But since two-tier wages went into effect, there has been little need to hire new workers. The downturn in the economy has led to a series of production and capacity cuts to bring supply in line with a dramatic drop in demand.

'Too much capacity'

"Looking at volume today, and where it is projected to go, there is still too much capacity and people," said Laurie Harbour-Felax, president of Harbour-Felax Group consultants in Berkley. As automakers continue to adjust, "it means more people out the door," she said, and the need to "buy out as many senior people as they can and bring in two-tier wage people."

Effective Monday, Chrysler hourly workers were being offered buyout programs similar to those available in the second half of 2008, when car sales began to fall off dramatically.

"The original window to offer the programs was slated to begin in December and run into January, per an agreement with the UAW," Chrysler said in a statement. But when it became necessary to shut down all 30 North American plants Dec. 17 for a month for inventory control, and subsequently extend the shutdown for some facilities, the rollout of the buyout packages was pushed back to this month.

Many UAW members "raised concerns that more of our members may have accepted Special Packages (last year) or explored other options if they had knowledge of the changes in (collective bargaining agreement) that may impact their current situation, i.e. elimination of the job bank, etc.," General Holiefield, vice president and UAW director of the Chrysler Department, said in a letter to union officials.

Holiefield said that led to an agreement to offer similar programs now, with a Feb. 25 deadline, to employees of all but Wisconsin's Kenosha Engine Plant. Halprin said logistics are being negotiated to include Kenosha.

While many Chrysler packages are the same as those offered last year, some substitute a car voucher as part of the final sum. For example, workers eligible for a $70,000 buyout last year are now being offered $50,000 and a $25,000 voucher for a car.

Vouchers were included in packages Chrysler offered 5,000 salaried workers last year.

The vouchers offer two benefits: They could boost auto sales, which keeps plants busy, and offering new cars in lieu of cash keeps more money in Chrysler coffers.

GM offers less

The GM offer is not as sweet: It includes the same $25,000 voucher for a new GM vehicle but only $20,000 in cash to eligible workers, said Ghana Goodwin-Dye, president of UAW Local 909 in Warren.

GM also is offering early retirement to workers at least 50 years old with 10 years' seniority, Goodwin-Dye said.

"We had heard rumors a buyout was coming, but our members were truly expecting a little more than this," she said. "Especially since Chrysler's was much bigger."

The offers come a week after GM announced it is cutting 2,000 jobs in Michigan and Ohio.

Harbour-Felax said the long-term plan is to take people off the payroll now and, when the economy bounces back, assume they are available to call back or contract the work.