Tuesday, June 27, 2006

Two GM Stories.

The Detroit News is currently carrying two significant stories of what is going on at the struggling GM and its (semi) independent (semi) subsidiary Delphi.

First of all, the number of buyouts accepted by GM employees exceeded their expectations and they will be able to eliminate jobs they want eliminated two years early. While it is welcome in the board room and Wall Street, and is probably good news for most in the long run, in the short term many people will now need new jobs. I think it shows little confidence in a company's future when that many people are willing to bail. Of course there is always an eye openning line in most articles:

GM and Delphi will have to scramble to keep plants and assembly lines running by recalling laid-off workers, transferring workers from other plants and hiring temporary workers.
GM said about 9,000 workers have left the company and the remaining workers who took packages have departure dates scattered through the end of the year.
"We feel highly comfortable we can offer continued focus on great quality," Wagoner said.
Healy estimated the cost of a temporary employee at $19 an hour, compared to about $80-an-hour in wages, benefits and retirement costs for current workers. "That's a huge savings," he said.

I think a lot of unemployed people would be quite happy with a wage/benefit package worth $19/hr.

The other GM story is a little brighter. GM is bringing back 0% financing on select models. This is probably one of the smartest things they could do right now to get some models moving off the lot and make room for the '07 models. I would only change the dates of the special and run it a bit longer to help clear out the old models.


Blogger ABFreedom said...

I wish them good luck. It's one heck of a struggle, and competition is stiff, and in some cases, unfair.

10:00 PM  
Blogger Skip said...

How can it be a "good idea"?? these people, many in thier 40's and 50's, are trading retirement, some security, health insurance, ALL thier bennies for what?? 2 years income?? Basically what GM is doing is shifting the responsibility of many people who have little or no saleable skills from thier payroll to our state, or federal governments. Remember a few years ago when MiBell did the same thing? Many of them now work at WalMart and have lost EVERYTHING..

10:30 PM  
Blogger Gayle said...

They must do what they must do in order to survive. If they go under then no-one works!

9:03 AM  
Blogger Lone Pony said...

How can they afford 0% financing?

1:32 PM  
Blogger shoprat said...

skip These people are leaving what they see as a sinking ship and feel that 2 years income in hand is better than what could well be an empty promise. The cut in payroll will in turn improve GM's survival chances.

LP They would rather sell it at 0% then have it rust in the dealer's lot. One makes very little profit and the other is a net-loss.

2:46 PM  
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