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When General Motors was on the verge of bankruptcy, cuts were made to salaried workers' pay and benefits. The move was important to help preserve as much cash as possible while also showing the federal government and the United Auto Workers that everybody in the company was making a sacrifice. Some might even say that salaried employees sacrificed more than others, as thousands were given pink slips and all lost health care benefits after age 65.
After bankruptcy, The General restored the seven percent pay cuts, and now the company is reportedly restoring merit pay increases for 2010. The Detroit News reports that GM told employees before they left for Christmas break that merit pay was being restored; likely a nice bit of news at the end of a very depressing year.

Joe Phillippi of AutoTrends Consulting Inc. in Short Hills, NJ tells the DetNews that the move was necessary to help GM retain its best workers, adding "Given the number of departures they've had, particularly senior people taking retirements or buyouts, you run the risk of a lot of brain drain and losing institutional knowledge."

[Source: The Detroit News]


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  • 18 Comments
      • 5 Years Ago
      Successful corporations must have everyone on the team working for the common good of the corporation. GM is trying to herd cats for one common goal and they don't have a shepherd with cat herding experience.

      Hiring a successful baseball coach to rebuild the football program never inspires confidence. It's even worse whenever the new coach brings in assistants from baseball and soccer teams. The morale of the team was already in the crapper and now it's worse.

      The team knows they have a severe problem but the situation is getting worse instead of better.

      • 5 Years Ago
      They are receiving a government welfare check like a welfare queen in the projects. There is no honor in it. I am a virtuous person who works for my money, so I could never buy a GM product. It would be an embarassment to me and my children and an isult to our honor.
      • 5 Years Ago
      Merit pay is essential, you have to reward talent and punish and fire those who are too busy surfing the web and blogging all day long. The issue is to strike that balance where rank and file people who perform well do get the same opportunities as those who are on top and who give merit pay to themselves.
        • 5 Years Ago
        Merit pay isn't required to get rid of web surfers and bloggers. That's called discipline. It would be the stick part. Merit pay is the carrot. Personally I think merit pay should be limited to profitable companies. If you aren't making a profit then everyone should understand bonuses are off the table. It isn't like GM is going to turn around and tell the UAW they can take some of the concessions back now. It is typical of GM's twisted corporate culture that they would even think of paying bonuses based on their current situation.
        • 5 Years Ago
        @ Judy, i think if company is profitable it is even more important to keep the talent. In my department we have 6 people, basically 5 retards and one genius, without that one person the department just doesn't have the brain power to tackle anything that is not part of the usual routine. In my opinion the 5 can be replaced easily, but that one person is very, very difficult to replace and you have to pay extra if you want that one person who supports 5 others to stay with the company.

        P.S. You have seen my posts here, i think you can guess to which group i belong.
        • 5 Years Ago
        If I say you're one of the retards, I have more than 80% chance of being right, so go with the odds and assume you're one of the retards.
      • 5 Years Ago
      I always chuckle when I hear bad corporations keep talking about how they need bonuses and merit pay to keep the good talent.
      This particularly seems to be the case with the banks on Wall St.
      If these guys are so talented and great, then why are your companies in the toilet and on life support?
        • 5 Years Ago
        The same reason Dan Marino doesn't have a ring.
      • 5 Years Ago
      GM is too big and the old guard is still there. In the Design devision it is all the same people running it. There is still much dead weight that for whatever reason GM is too scared to get rid of. They have too many people protecting people who shouldn't be protected. It is really too bad for the good people that work there as they get placed into the bad stereotypes by default. The good people that work there are not promoted as they should be. If they want to do something differently and better, they are still seen as trouble makers...mainly because they are always seen as a threat if their manager or director sees that they are opening up an issue they should have caught or somebody should have caught. GM needs to change it's culture.....but take a look...changing a culture in a company as old and big as GM...has seldom been done....and it's been mostly only been done from the top with someone who ensures their decisions on how things are run...are done all the way to the factory floor and by the same token is able to provide a culture that rewards those who try the hardest to keep the company competitive vs. those who are simply patriotic about the company but do nothing to keep it competitive.
      • 5 Years Ago
      GM as a company is a joke and any internal activities on their part to appear as a real company are a waste of time. Bottom line GM sat and waited to be bailed out instead of doing anything to remain a real company. They had the biggest heads-up you can get that Toyota was passing them in volume and had passed them in quality for over a decade. Instead of getting rid of Saab, Pontiac and Saturn years ago they kept the status quo, I forgot how many billions they were hemmoraghing in the last months before the bailout but it was a lot. Now people are jumping ship, rightly so, and some merit raises are going to do something? They need to sit down and get their global strategy together and position their brands accordingly in each segment/market.

      The sad thing is I'm not a GM or American car basher, I actually loved GM trucks and some sedans (G8, Malibu, etc.) The company I hated most was Ford because of their nepotism. What did Ford end up doing, they hired Mullaly who had experience running companies out of bankrupcy and he mortgaged assets to give Ford the cash to make changes and NOT take bailout money. I was rooting for GM to get out of this and quickly but at this point I'm all for Ford wise choice to get someone who knows their job and performs. /end rant
        • 5 Years Ago
        "Toyota's recent hurdles are so ironic. They surpass GM and all of the issues that plagued GM for years become Toyotas."

        How is that so it still ranks no 1 in quality and customer satisfaction, the only mistake they made was over expanding the production capacity in US. By 2013 they will are on pace to surpass GM as no 1 Automaker in US.
        • 5 Years Ago
        Toyota's recent hurdles are so ironic. They surpass GM and all of the issues that plagued GM for years become Toyotas.
        • 5 Years Ago
        But it appears that the new Toyota is turning into the old GM... recalls... safety cover-ups (blaming stuck accelerators for sudden acceleration), too much product overlap (how many SUVs do you need?), extra "dead wood" divisions (Scion that is turning to a market failure), etc. etc.
        • 5 Years Ago
        @Aznauto

        It takes time to change those perceptions. Toyota has built up a very good reputation for a long time. A recall here and safety issue there is not enough to tarnish that reputation overnight. Those things barely register on the radar of your average consumer who just LOVES his Toyota corrolla and will never drive anything else.

        Give it time, and I guarantee the gap will close between Toyota and GM (although Ford will get there first).
      • 5 Years Ago
      har de har har. Brain drain? Loss of institutional knowledge? Perhaps the best thing that could be said would be for such things to happen.
        • 5 Years Ago
        "har de har har. Brain drain? Loss of institutional knowledge? Perhaps the best thing that could be said would be for such things to happen."

        I presume you are an ex-employee. aren't you?

        You did a big favor to this corporation, thank you so much!

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