GM buyouts a hard sell to over-abundant trade workers

David Barkholz covers labor issues for Automotive News.

If General Motors offers a worker buyout as part of this year’s auto talks, the biggest target, skilled trades, will be hardest to coax to leave.

They make good money. They tend to have the least physically taxing jobs in an auto plant. And the economy isn’t exactly offering a lot of new job opportunities these days, says Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research in Ann Arbor.

She asks a sensible question: “Why would they leave?”

The Detroit Free Press first reported Sept. 1 that GM and the UAW are considering a buyout plan in ongoing contract negotiations to replace a four-year agreement that expires Sept. 14. A source confirmed the proposal and Bloomberg reported more details today.

The carmaker wants seasoned workers to leave so entry-level folks can be brought in earning $33 an hour in wages and benefits vs. $56 an hour for traditional production workers and $61 an hour for skilled trades.

GM is especially heavy in skilled trades. Fully 25 percent, or 12,000, of its hourly workers are skilled trades who repair and maintain plants and equipment rather than make vehicles, Dziczek said.

That’s the highest percentage in the industry and contrasts with the 15-percent ratio run by most of the Asian and German automakers producing in the U.S.

The good news is that half the 12,000 skilled trades at GM are eligible to retire. They could take an incentive package to go and still enjoy a monthly retirement payment of about $3,600.

The bad news? GM probably can’t offer them enough money to leave.

In December, GM offered a $60,000 incentive for skilled trades people to retire. Fewer than 500 took the deal, even though the alternative was leaving 14 plants either closing or with a high numbers of layoffs.

Dziczek says she wouldn’t be surprised to see a low take-rate this time around, too, if the plan makes it into the UAW contract.

“When the future was uncertain, they wouldn’t leave,” she says. “Today, GM’s profits are up and the overall market segment is improved.”

ATTENTION COMMENTERS: Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Email Newsletters
  • General newsletters
  • (Weekdays)
  • (Mondays)
  • (As needed)
  • Video newscasts
  • (Weekdays)
  • (Weekdays)
  • (Saturdays)
  • Special interest newsletters
  • (Thursdays)
  • (Tuesdays)
  • (Monthly)
  • (Monthly)
  • (Wednesdays)
  • (Bimonthly)
  • Special reports
  • (As needed)
  • (As needed)
  • Communication preferences
  • You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.