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Workers Skeptical of GM Buyout Offer

RENEE MONTAGNE, host:

Today, our business news begins with buyouts for some blue-collar workers.

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The United Auto Workers Union, General Motors, and Delphi have reached an agreement on early retirement buyouts for more than 100,000 blue-collar workers.

As Jerome Vaughn of Detroit Public Radio reports, workers have plenty of questions about whether the deal is right for them.

JEROME VAUGHN reporting:

Word of the agreement first surfaced on Delphi's website yesterday. Shortly afterwards, officials from General Motors issued a statement on their web site.

Dan Flores is a spokesman for GM.

Mr. DAN FLORES (Spokesman, General Motors): You know, we've been working on this agreement with the UAW and Delphi for several months now, and, you know, there's been a lot of hard work, a lot of long nights, but, you know, everyone's pleased that we've reached this, and, you know, this is one step, as I said, a very important step, of our turnaround plan here in North America.

VAUGHN: The agreement gives the 113,000 UAW members at General Motors a choice of early retirement plans. Workers with the most seniority can receive up to $140,000 for their decision to retire. Others would receive smaller incentives for leaving GM.

Up to 13,000 employees at GM's former subsidiary Delphi Corporation can get a lump sum of $35,000 dollars for early retirement. Five thousand Delphi workers will also have the opportunity to become GM employees again.

Delphi, GM's biggest parts supplier, was spun off from the automaker in 1999.

At GM's Detroit Hamtramck assembly plant, workers on the morning shift filed out of the plant with pieces of neon green paper describing the basics of the buy-out program. Some workers say they're going to jump at the opportunity to leave.

Randy Turlickey(ph) has worked at GM for 29 years.

Mr. RANDY TURLICKEY (GM Employee): Man, I think it's great. I'm ready to go, man. I'm wore out, tired. Offer us money, give the young kids a chance to take over.

VAUGHN: All union members with ten years or more of service can receive a $140,000 dollar buy-out, but in order to receive that amount, they have to sever all ties with GM other than their vested pensions. That means no company healthcare program in retirement.

Carl Tidrick(ph) says the deal is the best that the company could come up with, even though it leaves much to be desired.

Mr. CARL TIDRICK (GM Employee): The medical has a lot to do with it, whether they're going to be able to stay with it. I think they're thinking towards the next contract, as to what might happen then concerning medical benefits. Medical benefits are worth as much as the retirement itself.

VAUGHN: A key issue to both GM and Delphi is just how many employees will take a buy-out. Officials say they don't have an estimate, but the answer is critical.

GM announced last year that it plans to eliminate 30,000 jobs by the end of 2008 as part of a company turnaround plan. The automaker posted losses of 10.6 billion dollars last year. The number of buy-outs is even more important for Delphi, which filed for Chapter 11 bankruptcy protection back in October. Both GM and Delphi need to eliminate jobs in order to cut costs.

Dave Kohl is chairman of the Center for Automotive Research. He says the deal between GM, Delphi, and the UAW is groundbreaking.

Mr. DAVE KOHL (Chairman, Center for Automotive Research): I think it is really an historic agreement. It goes beyond, I think, what I anticipated. It's very far-reaching, and I think basically, what it is is a roadmap for the resurrection of Delphi, the preservation of the UAW, and ensuring the future of GM.

VAUGHN: The cost of the three-way deal to General Motors won't be small. The automaker estimates that it will spend between $5.5 billion and $12 billion dollars to honor the commitments it made when spinning off Delphi seven years ago. But Kohl says both companies and the union realize that their futures are clearly tied together.

Mr. KOHL: In the past year, and we've seen this recognition that there is a mutual interdependency between the parties, that is, if anybody kicked a hole in the bottom of the boat, everybody was going to drown. And I think that brought a sense of urgency and creativity, and an interest in working collaboratively on this that was really unusual.

VAUGHN: GM says the first of its early retirement packages should be accepted by June 1st. Delphi's participation in the agreement must still be approved by a federal bankruptcy court.

For NPR News, I'm Jerome Vaughn, in Detroit. Transcript provided by NPR, Copyright NPR.

Jerome Vaughn
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