According to an article in the Star-Telegram 7,500 General Motors Corp. workers, approximately 12 percent of the automaker’s U.S. hourly work force have signed up for buyout and early retirement incentives to leave the company which is struggling to avoid bankruptcy.
The article said:
GM offered $20,000 cash and a $25,000 voucher to buy a car to all of its 62,400 hourly U.S. employees in an effort to further trim its blue-collar work force to match reduced sales.
Most of those who chose to leave took early retirement offers, said a person familiar with the numbers who did not want to be identified because the breakdown had not been made public. There were very few who took the buyouts, the person said.
The fact that most workers did not take the $20,000 cash/$25,000 car voucher is not surprising considering that $20,000 won’t go far for a worker who has suffered a job loss . We won’t even talk about the car voucher again because that’s just beyond ridiculous to offer this to people who are losing their careers and entering a job market that is strained to say the least.
But the most alarming thing about this article is that only 12% of GM’s (soon-to-be jobless) workers refused to take the buyout even though GM is clearly facing bankruptcy. But I guess the workers are left with little choice, either hang on to their jobs or voluntarily enter into unemployment for what may be an extended period of time.
Other workers need to watch these developments because they may be a sign of how job losses will be implemented in the future. I’m not sure about the details of this buyout offered by GM; but I’m guessing leaving voluntarily may affect worker’s access to unemployment insurance
At this point all American workers, especially those with debt, need to begin to prepare themselves for possible job losses. As we continuously mention on this blog, the job market is extremely tight right now, which means a worker experiencing a job loss may remain unemployed for an extended period of time.
Even with unemployment insurance benefits, it will be impossible for most unemployed workers to maintain their debt payments. Therefore, workers who think they may experience a job loss need to educate themselves about their bankruptcy options so that they can protect their assets even if they lose their job.