GM, UAW Agree to Major Early Retirement Program
The United Auto Workers union said Monday it had agreed to an early retirement program with General Motors Corp. that would let some workers as young as 50 leave with full benefits, potentially slashing more than 10,000 jobs from the auto maker’s hourly work force.
The plan will be financed by up to $450 million in funds set aside by the UAW and GM for training. It is the latest sign of a more cooperative relationship emerging between the company and its union--even as GM seeks to eliminate 54,000 UAW jobs by 1995.
“We have said all along that we sought a problem-solving relationship with GM management, and this agreement demonstrates that we can work together to address the challenges faced by the union and the corporation,” UAW Vice President Stephen Yokich told union leaders from GM plants around the country, who gathered in Detroit Monday to hear the details of the plan.
Under the retirement plan, workers between 50 and 61 who have put in at least 10 years with GM can retire with full pension benefits, even if they go to work somewhere else. Workers 61 and older can retire with their full pension benefits, plus $13,000 toward the purchase of a new U.S.-built GM car or truck. Those who take the deal must retire on Feb. 1 or March 1.
GM would not say how many workers are eligible for the program, but a recent UAW survey showed that 7,000 workers over 50 would be interested in retiring early, and UAW officials said many more are eligible. The average age of a UAW worker at GM is 46.
The plan calls for the company to recall one laid-off worker for each UAW member who retires under age 61, and one for every two who retire at 61 and older. This will reduce the amount of cash the auto maker pays to the 22,000 workers currently on long-term layoff who receive nearly full salary under the terms of the current union contract.
The rapid deterioration of the $3.35-billion fund GM set aside in 1990 to pay laid-off workers provided an incentive for the union to agree to the retirement plan. The fund will run out next month, though UAW officials said workers on layoff will then be paid out of a separate fund, formerly reserved for workers on short-term layoff.
While some in the UAW ranks had hoped for a more lucrative deal, such as a lump-sum payment exceeding the $13,000 vehicle voucher, the plan was viewed by many as an attractive alternative to the limited options they face as the auto giant carries out its massive downsizing plans.
