GM, Chrysler offer workers cash, cars to leave
DETROIT (Reuters) - General Motors Corp GM.N and Chrysler LLC on Monday began offering a new round of retirement incentives including vouchers for cars as the automakers move to reduce workers and inventory.
GM will offer its U.S. hourly workers $20,000 in cash and a $25,000 voucher to buy a vehicle as an incentive to retire or leave the company, an official with the United Auto Workers union briefed on the plan said.
The No. 1 U.S. automaker declined to comment.
Chrysler's program offers retirement-eligible workers $50,000 in cash and a voucher of $25,000 for a new Chrysler vehicle if they leave, according to a person with direct knowledge of the offers.
Workers who opt to leave Chrysler with no retiree health care benefits would get $75,000 and a $25,000 car voucher, the person said.
Chrysler confirmed that it was offering a new round of buyouts to workers that would be available until February 25.
Both GM and Chrysler are under pressure to cut labor costs further under the terms of a $17.4-billion U.S. bailout extended to the two struggling automakers.
Under the terms of that emergency lending, Chrysler and GM face a February 17 deadline to show how they can cut debt, labor costs and other expenses in order to be viable in a deeply depressed market for new cars and trucks.
As Chrysler's sales have tumbled, the automaker has slashed production, cut models and eliminated jobs. The automaker, controlled by private equity firm Cerberus Capital Management CBS.UL, has cut some 32,000 jobs, $3 billion in costs and about 30 percent of its production capacity.
But sales continue to retreat. Chrysler led a sinking market lower with a 53-percent drop in December sales, and analysts see a chance for a drop near 50 percent when it posts sales results for January this week.
Both GM and Chrysler have offered buyouts to trim factory payrolls in recent years.
But the terms of the current round of offers appeared to be less generous than prior buyout packages.
GM said last May that about 19,000 U.S. factory workers -- just over a quarter of its blue-collar work force at the time - -- had taken buyouts to leave the payroll.
In September, Chrysler had offered some 14,000 factory workers in Michigan lump-sum payments of up to $100,000 plus tuition assistance and some support for moving.
Many UAW workers have been reluctant to take the most recent buyout offers since the deep drop in the housing market has made it almost impossible to sell their homes. Continued...
