NEW YORK (CNNMoney.com) - General Motors is offering hourly workers as much as $140,000 each to leave the company as the troubled automaker extends its push to cut labor costs and put an end to billions of dollars in losses.
GM (Research) announced an agreement with the United Auto Workers union Wednesday, although it did not give the details of the offer extended to all 113,000 U.S. hourly employees.
But a person familiar with terms of the offer said that UAW members with 10 years or more service with the automaker will get $140,000 if they agree to forsake the retiree health care coverage that has become a crippling burden for GM. The workers will keep their accrued pension benefits, though.
Those with less than 10 years service will get $70,000 if they leave without the health care coverage.
The company also announced a much anticipated agreement Wednesday with bankrupt auto parts maker Delphi and the UAW that is seen as a key to avoiding a crippling strike at the parts supplier. GM said hourly employees eligible for retirement are being offered $35,000 to retire early.
GM also will offer Delphi employees with 30 years of service the same $35,000 to retire. And GM is also offering jobs at GM to 5,000 Delphi employees as a way to help its former parts unit cut costs.
GM lost $10.6 billion in 2005 and its executives have not said when they expect it to return to profitability. They have said the agreement with Delphi as well as an agreement with the UAW to cut its own labor costs were keys to return to the black.
Shares of GM rose about 1 percent in afternoon trading, but some industry analysts said GM's moves were not enough to change their view of the stock.
GM offers workers $140k to leave..
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Originally Posted by tony
