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The Honolulu Advertiser
Posted on: Tuesday, June 27, 2006

47,600 accept GM, Delphi buyouts

By Tom Krisher
Associated Press

DETROIT — About 47,600 hourly workers have decided to leave General Motors Corp. and Delphi Corp. through buyout or early-retirement offers, accelerating the distressed companies' plans to cut costs by paring their workforces.

At GM, where about 35,000 people will depart — mostly through early retirements — Chairman and CEO Rick Wagoner said he was surprised by the numbers.

But he said the number of takers will allow the Detroit company to reach its target reduction of 30,000 manufacturing jobs by Jan. 1, two years ahead of schedule.

GM previously announced plans to cut its 113,000-person U.S. hourly workforce by 30,000, closing a dozen plants by 2008.

"Over the past several months, we have accomplished a great deal in our strategy to reshape GM into a company that is more nimble, more global and built for long-term success," Wagoner said yesterday.

The deadline for GM workers to file paperwork for the offers was Friday, but they have seven days to change their minds. Friday also was the deadline for workers at Delphi, GM's former parts operation that is now a separate company, to file for early-retirement incentives.

Delphi said yesterday that about 12,600 employees represented by the United Auto Workers union took early-retirement offers at the Troy-based automotive parts supplier, which filed for bankruptcy protection last October.

Some Delphi workers also have an additional buyout offer on the table with deadlines that are more than a month away.

Based on preliminary numbers from GM, about 4,600 employees accepted buyouts and about 30,400 chose to retire. It is expected that most will retire or leave the company by the end of the year, GM said.

GM offered buyouts of $140,000 for workers with at least 10 years of service, while those with less than 10 years would receive $70,000. The workers would cut nearly all ties with the company except for vested pension benefits.

The automaker also offered an early-retirement option to workers with at least 26 years of service. Normally, employees can retire at 65 years of age or 30 years of service.

Delphi workers were offered a similar early-retirement incentive. But Delphi's effort to buy out some employees still needs bankruptcy court approval.

The nation's largest automaker said it expects to save $5 billion in structural costs in 2006.

Because so many people are leaving, both GM and Delphi will have to scramble to keep plants and assembly lines running by recalling laid-off workers, bringing in transfers from other plants and hiring temporary workers.