Crisis Averted? GM Seals Buyout Deal With Delphi
03-22-06, 01:06 PM
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Crisis Averted? GM Seals Buyout Deal With Delphi
DETROIT — Attempting to avoid a potentially fatal strike, General Motors offered to buy out up to 125,000 factory workers in a deal reached with its former parts subsidiary, the now bankrupt Delphi Corp.
Workers at GM will be eligible for buyouts of between $35,000 and $140,000 depending on seniority. Delphi buyouts will be capped at $35,000.
GM and Delphi had spent many stressful days hammering out the agreement with the United Auto Workers (UAW) union, which represents most of the hourly workers at each company. GM needed to help Delphi offer buyouts to workers after the bankruptcy to avoid a potential UAW strike that would have crippled North American production for the world's largest automaker.
The deals essentially offer buyouts to the majority of factory workers at the companies. It is still unclear how much the program will cost, though GM earlier reported it expected its Delphi exposure to be in the neighborhood of between $5 billion and $12 billion.
A strike could have cost GM up to $5 billion per month in lost sales. Considering the company had just reported a $10.6-billion loss in the last three months of 2005, it's not a stretch to suggest such a strike could have pushed GM into bankruptcy within months or weeks.
What this means to you: The General lives to fight another day. But these days, that just means another crisis is just around the corner. Is a recovery just around the bend…or bankruptcy?
Source: http://www.edmunds.com/insideline/do...ticleId=109732
Workers at GM will be eligible for buyouts of between $35,000 and $140,000 depending on seniority. Delphi buyouts will be capped at $35,000.
GM and Delphi had spent many stressful days hammering out the agreement with the United Auto Workers (UAW) union, which represents most of the hourly workers at each company. GM needed to help Delphi offer buyouts to workers after the bankruptcy to avoid a potential UAW strike that would have crippled North American production for the world's largest automaker.
The deals essentially offer buyouts to the majority of factory workers at the companies. It is still unclear how much the program will cost, though GM earlier reported it expected its Delphi exposure to be in the neighborhood of between $5 billion and $12 billion.
A strike could have cost GM up to $5 billion per month in lost sales. Considering the company had just reported a $10.6-billion loss in the last three months of 2005, it's not a stretch to suggest such a strike could have pushed GM into bankruptcy within months or weeks.
What this means to you: The General lives to fight another day. But these days, that just means another crisis is just around the corner. Is a recovery just around the bend…or bankruptcy?
Source: http://www.edmunds.com/insideline/do...ticleId=109732
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