AFSCME 3357-HOF'S BLOG

Detroit News on GM Job Cuts: at least 6 plants to close - 20% of workforce to be laid off.

The Detroit News has comprehensive coverage of GM CEO Rick Wagoner's announcement of massive restructuring at GM. At least 6 plants will close, and 25% of the workforce is to be laid off over 3 years.

I find most interesting what wasn't said - how they're going to cut their healthcare costs - up to $5.4 Billion this year. All of the cuts that were announced will save about $2.5 Billion. At the current rate of increase for healthcare costs, that savings will be countered by increased healthcare costs in about 4-5 years.

Traditionally, when GM closes plants, it pays off workers, and many of them take early retirement. The high level of retirees supported by a smaller (in historical terms) workforce, is a big part of GM's problems. I don't see how GM is going to shrink its way out of its financial mess -- UNLESS -- it wipes away history through bankruptcy court.

At least 6 plants expected to close - 06/08/05