About the offers on the table - 03/23/06 - The Detroit News

The Take it Or Leave it Dilemma of the GM Buyout: Which would you choose?

It's interesting that people my age, mid-40s, are offered $140,000 to walk away with no continuing GM benefits other than accrued pension. As a lawyer who theoretically has skills and the ability to make a decent living elsewhere, I'd jump at a deal like that; but if I just had a high school education, it would be a hard choice. In that case, in today's economy, I'd be hard-pressed to make even $30,000 elsewhere. Perhaps I wouldn't be able to find any job with health insurance. If I stayed with GM, it would only take two to three more years on the job to make up the $140,000.

On the other hand, if in 2007 GM runs out of money and goes Chapter 11, I could be handed my walking papers with no compensation at all.

For workers faced with this decision, the information in General Motors' delayed financial statements will be crucial. Paradoxically, the worse GM's current cash situation, the more employees will (should) accept buy-outs. Each buy-out may help GM's long-range prospects, but each buyout puts a drain on available cash. This will be true unless GM can offset buyout cash with funds that have been set-aside already for future pension obligations.






Details on the UAW - GM - Delphi Pact

As usual, the Detroit News has excellent coverage of breaking news in the Auto industry. The GM buyout pact is no exception.

Here's a link to the Detroit News story that gives more details on the agreement.

About the offers on the table - 03/23/06 - The Detroit News