BREAKING: GM, UAW reach agreement on Delphi

GM has announced that it has reached a deal with the United Auto Workers and Delphi that will reduce the number of Delphi and GM workers in North America via an "accelerated attrition program"; AKA early retirement buyouts. The deal will potentially affect somewhere in the neighborhood of 113,000 workers, and greatly reduces the likelihood of an UAW strike at Delphi.

Acceptance rates among GM employees will vary, but the company has stated a workforce reduction goal of 30,000 workers over the next two years. As GM employees take advantage of the plan, Delphi workers will be offered the opportunity to move into the open spots. The buy-outs will likely range from $35,000 to over $100,000, depending on age and seniority. Notable is the statement that the costs associated with the program will incurred as the employees agree to participate, and as such will impact the automaker's 2006 financial results.

[Source: GM; we've posted the full press release after the jump]

The program is expected to be offered to U.S. hourly employees at GM and select UAW-represented members of Delphi's hourly work force. It will include a combination of early retirement incentives and other considerations to help reduce employment levels at both GM and Delphi in a manner that benefits both eligible employees and the companies.

"When we announced the capacity rationalization and employment reduction plan late last year, we said we'd be working with UAW leadership to develop an accelerated attrition program that would help us achieve needed cost reductions as rapidly as possible, while at the same time responding to the needs of our employees," said GM Chairman and Chief Executive Officer Rick Wagoner. "We are pleased that this agreement will help fulfill that important objective. In addition, the agreement will enhance the prospects for GM, the UAW, and Delphi to reach a broad-based consensual resolution of the Delphi restructuring."

The program will be offered to all GM hourly employees, but overall acceptance rates will depend on individual employee decisions. The program also permits the flow of UAW-represented Delphi employees back to GM until September 2007. In addition, eligible UAW-represented Delphi employees may elect to retire from Delphi or flow back to GM and retire.

Under the agreement, GM has agreed to assume the financial obligations related to the lump sum payments to be made to eligible Delphi U.S. hourly employees accepting normal or voluntary retirement incentives and certain post-retirement employee benefit obligations related to Delphi employees who flow back to GM under the plan. GM expects to record the cost associated with the attrition program in 2006. The cost will be incurred as employees agree to participate.

General Motors Corp. (NYSE: GM), the world's largest automaker, has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one of the world's leading finance companies, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com.