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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