Buyouts in Detroit

United Auto Workers agrees to an early retirement deal to be offered to up to 100,000 workers at General Motors and 13,000 at Delphi.

General Motors Corp. and Delphi Corp. have reached an agreement with the United Auto Workers union to offer buyouts and early retirement packages to a large number of their union workers.

The program is expected to be offered to up to 100,000 UAW-represented workers at General Motors and 13,000 at Delphi. The auto-parts maker stated that certain employees would be offered a lump sum of as much as $35,000, according to Reuters. As for GM, reported the Associated Press, it will offer between $35,000 and $140,000, depending on years of service; the highest amounts will go to workers at auto plants that are scheduled to be closed.

The goal, of course, is to dramatically pare payrolls to reflect the significant reductions in capacity planned by the two companies. In a press release, the automaker called the agreement “an important contributor to GM’s turnaround plan in North America.”

“When we announced the capacity rationalization and employment reduction plan late last year, we said we’d be working with UAW leadership to develop an accelerated attrition program that would help us achieve needed cost reductions as rapidly as possible, while at the same time responding to the needs of our employees,” said GM chairman and chief executive officer Rick Wagoner, in a statement. “We are pleased that this agreement will help fulfill that important objective. In addition, the agreement will enhance the prospects for GM, the UAW, and Delphi to reach a broad-based consensual resolution of the Delphi restructuring.”

Delphi, which is currently in bankruptcy, added that as many as 5,000 UAW-represented employees may elect to retire from Delphi or to “flow to” and retire from GM. The auto giant reportedly agreed to pick up the tab for the lump-sum payments and certain retirement benefits.

The auto parts maker stressed that the plan is subject to a number of conditions, including approval in U.S. Bankruptcy Court.

GM’s plan needs no further approvals, according to the AP, which added that retirements could begin as early as June 1.

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