Automakers offer early retirement packages — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Automakers offer early retirement packages

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General Motors and Chrysler have offered blue-collar workers at selected plants early retirement packages. Both GM and Chrysler are attempting to cut costs after taking government loans to stay in business.

Chrysler’s offer for most workers is $75,000 cash and a $25,000 voucher for a car. Workers at plants in St. Louis and Newark, Del., will be offered $115,000 plus the $25,000 voucher. GM is offering $20,000 and the $25,000 voucher.

The buyouts allow the struggling manufacturers to cut short-term costs, but also reduce future labor costs. Both companies negotiated contracts with the United Auto Workers that allow them to pay new workers about half of what current employees make. Recalled workers would be entitled to the higher pay rates.

Additionally, the manufacturers eliminated a fund that paid laid-off workers almost what they made while working. Congressional leaders insisted on closing the so-called job bank as a condition of making the loans.

Ford also made smaller-scale buyout offers to targeted workers throughout 2008.

It should be easy to spot workers who took the buyouts. They’ll be the only people driving new GM or Chrysler cars.

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