REPORT: GM employees pay cuts to be restored - but not for senior execs
2009 has been a rough year for General Motors' white collar workforce. The embattled workers have endured bankruptcy, job cuts and pay reductions, but today some good news came via email. The Detroit News is reporting that Human Resources Vice President Mary Barra sent out an official missive today telling workers that the 3%-7% paycuts the workers received back in May would be restored effective September 1. Executive pay cuts of 10% are also being restored, though the base salary reductions of senior executives will not be restored.
GM says it saved $50 million by instituting the cuts during the four months they were in effect, but the decision to restore the pay levels was made by GM's new board of directors and executive management. Company spokesman Tom Wilkinson says the paycuts would help retain the employees it had left, adding "we've got a much smaller company now and the quality of our people is more critical than ever. We are in risk of losing good people."
Recent news for white collar workers at GM isn't all rosy, though, as the company plans to cut up to 6,000 salary workers through attrition and involuntary layoffs. GM stated earlier this week that it plans to reduce its white collar headcount by 1,000 workers by the end of September.
[Source: Detroit News | Image: Bill Pugliano/Getty]
_opt_thumbnail.jpg)
_thumbnail.jpg "2011 Audi A8: Live from Miami")
Reader Comments (Page 1 of 2)
Jimbo 6:10PM (9/11/2009)
Good. The workers should get their pay restored before the idiots at the top do. The talent of any manufacturing organization lies in the engineers and the factory workers, not at the top.
Reply
Venom 6:17PM (9/11/2009)
I disagree with this move by GM.
The company is not financially solvent yet and they have not paid back the money they owe.
Reply
MoeJoe 6:37PM (9/11/2009)
Venom, whats a couple million in a multi-billion dollar bucket?
They have got to keep the talent if you ever want that money back.
Reply
Venom 7:05PM (9/11/2009)
Talent???
If they were so talented the company would not have been almost out of business.
Instead of raising the salaries back up, they should fire them all. Top down and start over.
Jimbo 8:00PM (9/11/2009)
It wasn't the engineer's fault that the company went bankrupt, nor was it the factory worker's fault either (other than the absurd union salaries and work rules). In both cases, they were simply doing what they were told by their superiors. True leadership comes from the top. If the leadership is terrible, don't blame the people that can't do anything to fix it. It may not take much talent to tighten a nut or clean floors but people are still needed to do it. And without talented engineers, they're just plain screwed. The execs? Well, they could all die in a plane crash and a whole new set would crawl out from under a rock to maintain the status quo.
daleam 9:27PM (9/11/2009)
Most of those work rules had been removed some time ago and those union wages were never as ridiculous as reported. Not even close.
Judy Zik 11:19PM (9/11/2009)
Not a well timed move. I really doubt there was that much competition in the white collar auto executive job market in Detroit at this point in time. As it stands the ink is barely dry on the bankruptcy papers. They should have at least waited 6 months. The company should be reporting positive financials before anyone gets a raise.
The one cut you will never see reversed is the one that wasn't fair and that was the cuts made to the retired workers and widows. They already put in their time and don't have the luxury of changing jobs. Many are old and frail and suddenly found out they lost benefits they had been promised all their life just when they needed them. That was the most disgusting thing they ever did.
daleam 3:11AM (9/12/2009)
Judy - Nobody got a raise. It was a restoration of wages taken from these people. If you want to argue against it that way, fine. But don't call it a raise. And those retirees you speak of, I do agree that they got the shaft. I know because my mother is one of them. It sucks and she doesn't like it, but she is dealing with it as best as she can.
Shamdiddly 8:13AM (9/14/2009)
It was a nice thing for GM to do. I would've rather had the 401K matching returned, however, I ain't complaining.
One thing about people claiming these pay cuts needed to return to retain talent - I don't think that is very accurate - It's not like the late nineties where a good engineer could name his price.
Just where would people go for other jobs? The industry is decimated right now. As an automotive engineer, you're trapped near the industry, especially if you have a home and a family.
Justin 6:44PM (9/11/2009)
While my feelings would be different if I was a GM employee. I think they get paid enough, even with the cuts. And where are they all going to go work if they don't get that pay back? Some factory job that pays 1/3rd what Auto Union does? That's IF they could get a job there. A lot of people don't have the "luxury" of a job at all, let alone one as good as they have. A couple million is a big drop in any bucket, and GM needs to do everything it can to save every drop.
Reply
alex 6:53PM (9/11/2009)
Yeah, because people who are engineers with PhDs can only get factory jobs.
info2x 7:03PM (9/11/2009)
I think you missed that this is for white collar jobs, not blue collar
Justin 8:07PM (9/11/2009)
Either way, the job market in that area is so bad that factory jobs may actually be all they could get if they left GM. Even though they are Ph.D holding white collar workers. Suck up the pay cut and make a sacrifice to help the company as a whole.
Jimbo 8:21PM (9/11/2009)
I think it's a misguided attempt to maintain morale. As someone who survived 3 rounds of layoffs in a period of 3 years at an electronics supplier before finally getting cut in a 4th one, the threat of a layoff is an absolute morale killer. Offering increased money with the specter of losing your job really won't accomplish anything. People will still sit around wondering who will get cut, will it be me, what is my backup plan, is there anything I can do to save my job, is there anything I can do to make sure a coworker is chosen instead of me (terrible thought but it happens), how bad will it be if I survive, will this be the last one? Little actual work will get done until the layoff is complete.
Instead, they should do the layoff and then restore the salary of those that remain as a way to restore morale somewhat.
daleam 9:34PM (9/11/2009)
Jumbo - I find myself in agreement with much of your comment. But you also have to understand that huge job cuts have already been made and are still being made. These people are only getting back what was taken away and they are far from wealthy. GM needs to retain the talent where it is. These are the people who are needed.
MoeJoe 7:20PM (9/11/2009)
Despite what you say I think the white collars at the bottom and middle are very talented.
The idiots at the top are the ones that need to be diced for the brutal management of the designers and engineers.
Reply
elprogramer 12:14AM (9/12/2009)
Having interacted with these "talented" people, I will not refute your statement, but only cringe at the prospect that the company is being run by people who are worse.
Clavius 7:25PM (9/11/2009)
I love the scapegoat comment of "To keep good talent" didn't Wall St. use that excuse with bonus's and such? That and some of these same people who just got some of their pay restored will soon lose their jobs. If I was told "You'll be getting back 5% of your pay but in a few months there is a good chance you wont have a job.", that's not really reassuring you know. That and as someone else stated if the talent was so good they wouldnt of gone bankrupt in the first place.
Though I am happy that someone in HR realize's that if they restored the top senior's there would be one hell of a PR nightmare on the news tonight.
Reply
Jimbo 8:07PM (9/11/2009)
The execs can't get their salaries restored without approval from the Auto Task Force, otherwise I'm sure those morons would have done so already (or even given themselves a raise for "bringing the company out of bankruptcy"). Say what you want about the government stepping in to help GM and Chrysler, it is at least keeping the execs from doing stupid sh!t like that.
Clavius 8:18PM (9/11/2009)
True statement Jimbo. As much as I hate government control and all that but in this instance its a good thing. Although you know they'll find a way around it via bonus's or whatnot. I never really understood the pay gap between a CEO/Exec's and the "common worker" if you will. If your helping run your company into the ground tell me again why they deserve such a high pay grade? I dunno.. maybe this is why I hate big business.