While General Motors is expected to grow its market share and profit margins in the U.S. market, the company is also looking to subtract from the number of skilled-trades workers it employs in many of its plants across the country. It will do so by offering a new round of buyouts in select locations, though the terms are not yet known. Though as a reference, GM did offer up to $75,000 in late 2011 to roughly 4,000 skilled trade workers.
According to the Center for Automotive Research in a Detroit Free Press report, GM skilled workers in the UAW, such as an electrician or millwright, make an average of $32 an hour. If the new round of buyouts are anything like the 2011 round, the automaker could save around $57,000 a year for every skilled-trades worker that opts to take the buyout offer and is replaced by an entry-level assembly line worker.
Comments
This is just one part of the new round cutting cost at GM.
For the most part they still have too many people in the plants and would still like to pare them down. Excess labor is still a problem in many plants.
The tradeoff of saving a bit of money vs. the loss of a skilled worker is a lose lose proposition for the company.
Not if most of them are sitting on their butts with nothing to do.
Per the original article GM has way too many skill trades guys for the work they have. GM has updated most every facility they have with modern tools and this stuff just does not break down as much as they used to. My brother was a pipe fitter at Flint Chevy and retired early about 5 years ago. Even then things were mighty slow.
This is always a delicate dance. As production and manufacturing changes, incorporating automation and innovation, jobs are either eliminated or the work changes. The key is to rightsize the workforce (expand or contract) in accordance with the change. Sometimes it involves buy-outs or just letting attrition do its thing. Early retirement can be a good thing, but it can also be a bad thing if the employee is not mentally or financially ready for it.
I always have mixed feelings about this but the thing is, if it is *voluntary* then I see no harm in it. If someone offered me $75K right now to retire, I would take that in a heart beat! And I am decades from real retirement! Why not take the cash and travel or take another job somewhere else, part time.
@CVT I agree with you that if someone is not ready, then they should not retire. But if it is voluntary, you don’t have to take it. I wonder if they offer it to everyone or if they only offer it to a subset of employees, like those at the highest pay grade or closest to retirement.
How about cutting the outrageous salaries of the top executives? Many CEOs, for example, make about 300 times the income of an average worker, yet somehow, they always seem immune when the axe begins flying.
Ray, agreed but this needs to happen across all companies…
As the private and public sectors sheds jobs, reduces wages and retirement benefits high volume big ticket industries began to target and rely on subprime buyers to maintain sales level and to acheive growth.
Short term profit schemes undermind the national economy with high unemployment and economic dependency. Markets in emerging economy’s have the advantage for growth and as will happen in China, India and Korea, once those countries are capable of developing technologies and experienced American investors will find it less profitable, more competitive and face more regulations from those countries to invest offshore.
China has the cash to pay for American wheat while 47% of Americans have to pay with food stamps. Go figure eh?
This is the new world order. Unless you are a specialist with at least a B.S. you are going to struggle to make a middle class living throughout your career, let alone hang on to a job.
So that is a hint, put down the remote control and get good at something that you have a passion for.
Work for one of the countries largest telecommunication companies. Seen buy outs and incentives to retire for the last 28 years. Yes they get people to leave and trim the work force but SO MUCH skill and knowledge leaves and the new replacements get no training and the replacement managers don’t have a clue. Reminds me of the days when they said you don’t want a car built on Friday, Monday, or before a holiday. Paring down is fine as long as quality doesn’t suffer.
@VetteGyrl…I spent most of my adult career as a Senior Manager in Information Technology with a large Bank. Over the course of my career I had to eliminate a number of positions, look for productivity improvements that would shrink the workforce, and terminate the lower performers. I eventually couldn’t stomach these corporate HR programs any more. I eventually lost my job as well due to a massive organization change. I never believed I would be exempt from these job losses and I always managed these programs with empathy for the individual. The trouble with ‘voluntary’ buy-outs is that you have people volunteering that you don’t want to lose. You might lose the ‘talent’ and good performers that represent the backbone of your organization. Some organizations that are Unionized take an approach whereby the ‘last in’ are the ‘first out’; meaning that the workers with the most seniority are most likely to keep their jobs. This is also not a good practice. I think it’s best to look at each employee and to ‘rank’ them in terms of their skills, capabilities, and behaviors against the context of the current and future/anticipated needs. it eliminates the subjectivity, particularly if a second set of eyes is called upon to review the analsysis. In the end, the weakest employees (those least skilled, or less likely to adapt, or re-train going forward) are likely going to be the ones who get the severance packages. I was very lucky. I lost my job on a Friday and had another job waiting for me on the immediate next Monday. I wasn’t ready to retire (age 55) but I got a wholesome severance package and moved on to another job; whilst starting to collect my retirement Pension from my employer of many years.
No matter which way you go, it sucks. When I was a contractor I always knew my jobs would end but it never really stopped me from feeling anxious about it when the time came. No matter what, if you are not walking off the job because you decided to do it, it’s always a little weird or scary in one way or another. I currently work for a union and it’s late in/first out. Until I was not the last one hired I was always looking over my shoulder.
I’m a skilled trades employee that works for g.m. First lets address the issue of the new equipment doesn’t break down as much, says who? A bean counter that works at headquarters?The companies selling the equipment to G.M.? The new equipment is just that, new. Does it breakdown? ALL THE TIME! Twice in the last year that awesome equipment has sent production home early. Most of the calls during production are electrical problems with those systems. TOO MANY OF US! REALLY? I’ve been in the trades twelve years, there used to be 66 millwrights at my plant. now there are 33 of us.That equipment needs to be maintained just like anything else, it doesn’t run on pixie dust!! To the gentleman who posted earlier about your brother-in-law..maybe he sat on his ass all day because he and his boss where lazy. We have dead weight in our company just like any other, alot less then we used to. The uaw worker is always the lazy one right? Well not if your a good manager of your people.. if your good at what you do you can the laziest piece of crap off his ass! We have bosses that don’t want manage people or projects for that matter. When a tradesman is covering the production line he is like a fireman, we listen to the radio for breakdowns and answer the call! Get the line running again,(put out the fire) how much money do you think it cost a company to pay an entire assembly plant to sit while the line isn’t running? While the line is running you will have tradespeople sitting, covering the line.. that IS THE JOB,but not all of us cover the line so were not sitting around. When production ends for those covering the floor repair work begins…there is repair or p.m. work on equipment new and old daily! They have cut the trades very thin already.. they believe that contractors can take our place..they come and go with no vested interest in G.M. and it shows in the quality of there work, we’re always fixing and changing what they do. All of us that work for G.M. want them to be profitable,there making more money now then ever, LABOR COST are right in line with toyota. They used to waste money like drunk sailors, cuts had to be made but in some cases like with the skilled trades i believe there cutting it to close and it will bite them in the long run. A vast amount of knowledge,experience and skill has already left…too many in my opinion. I’M not saying this because it will eventually be my job that goes, I was looking for a job when i found this one and I’ve always worked in skilled trades so I won’t go hungry. BTW how many young people are learning a trade? who will fix these machines that never break? This also the first union shop I’ve worked for,98% of the people i work with are hard working, quality minded people who get grouped in with the bad apples. When G.M. sells the stock that the U.S. taxpayer owns and upper management can once again increase there bonuses and pay, I’m sure the loss in profits will once again all be the fault of the over paid worker.
@ED…I’ve got to agree with your points. The key to successful ‘rightsizing’ and job elimination is to target the right functions and individuals that have the least impact on the effective and efficient running of the operation. A ‘good manager’ will have his/her ear close to the ground and in effect, have employee participation/engagement in the process. Too often decisions are made at the ‘top of the house’ by Executive out-of-touch with the operation. Or they make a decision that doesn’t involve any real management judgment. For example, I managed a $87 Million budget that was largely made up of fixed costs or contractual-based costs. But I had the lions-share of the cost reduction challenge because it was forced down on an allocation basis. For example, each manager had to find a 15% savings, whereas my costs were fixed. I had very little discretionary costs in my budget (such as travel and training) as opposed to fixed costs for computer hardware and software. And to your one point….what gets cut is often the lifeblood of the operation that goes unnoticed. Things like preventative maintenance or overtime to keep a production operation/line running is often under scrutiny simply because it doesn’t get value visibility like some other elements of the budget. The key (in your example) is for both the Management and staff to translate how these operating costs translate into value (e.g. keeping the line running at 98% availability) or the mean time between failures above an industry average. Bottom line: I think job losses, voluntary buy-outs, or forced early retirements…(whatever the action), can have tremendous impacts on individuals and corporations.
Value visibility. Exactly. I could not agree more.
Ed, America thinks the term UNION is a four letter word. I know where you’re coming from and fully agree. There are always workers who don’t care and looking for a free ride union or not. The problem with Co.s now is that they’ve alienated the entire work force and most workers are just there for the pay check and there is no feeling of WE anymore.
You are very right.
I have been on both sides of the feeling towards unions. The last place I worked did the best they could to work within the rules. They groomed and trained awesome employees and it showed. Everyone there was happy and willing to give 110% every single day! If you needed help, someone was *always* there to help you out. The place I am at now, polar opposite. No one is happy, everyone is as lazy as can be and very little is done to retain awesome people, including me. WIth the work I do, this is a HUGE problem. Millions of dollars could be wasted and years of work could be lost with the kind of unprofessionalism that goes on here. The other place I never wanted to leave but life got in the way and I had to move to another state. This job, as soon as I could I found another place with that same WE attitude I desire.
My work ethic has always dictated that I give 110% to my work. I am passionate about what I do and have no desire to ever do anything else for money. But to really feel valued for that takes a special place. Once you find a place like that and know places are out there that really do care about their employees, you never want to work for anything less. I will never settle for less and I always encourage others to find that place too.
If you love what you do you never work a day in your life, right? 😉