Once you have cut everyone, who is left to cut? That's the problem facing GM
, according to UAW
President Ron Gettelfinger. The General has already harvested the low hanging fruit with previous buyouts, but they're embarking on another round to try and further reduce labor costs. We've already covered
the specifics of GM's latest buyout offer that attempts to sweeten the enticement to leave so that cheaper labor can be brought in. The new offer was made to 74,000 employees, and Gettelfinger estimates that about 15,000 will accept the offer. Uncertainty over what the US economy is likely to do in coming months is playing a role in the decision for the roughly 46,000 GM employees eligible for retirement. Money is no longer pouring out of the housing market, and people who thought they'd cash out for a retirement in tropical climes are rethinking their plans while we all wait on tenterhooks to see what our brush with recession will look like.
In 2006, GM was able to entice 34,000 workers to leave, but since then the world economy has been stricken by a raft of bad loans made by brokers without scruples, so sitting tight and waiting out the storm might look like a smarter option. Sitting tight for just a little longer might look wise considering the accolades for GMs cars as of late. It really appears like the turnaround has gained some traction. Then again, if you're staring down retirement, putting a fat lump of cash in a tax free 401k might look awfully attractive, too.
[Source: Detroit News