GM offers buyouts to entire unionized workforce after $722 million loss in forth quarter; record $38.7 billion loss for the year in 2007

Published: February 13, 2008 in the New York Times: (see entire article here.)

“DETROIT — A surprisingly tough fourth quarter and a gloomy outlook for the United States market prompted General Motors to offer buyouts Tuesday to its entire unionized work force.

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G.M.’s latest “special attrition program” covers all its 74,000 hourly employees and underscores the challenges it faces in its turnaround effort.

G.M. said Tuesday that it lost $722 million in the fourth quarter and a record $38.7 billion in 2007, although the annual loss was inflated by a one-time charge of $38.3 billion to write down deferred tax assets.

Still, few involved with the industry had predicted that G.M. would begin another companywide program to shrink its payrolls.

“A buyout that broadly based is a surprise and a very bold statement about the condition of the American auto industry,” said Harley Shaiken, a labor professor at the University of California, Berkeley.

G.M.’s buyout package follows a similar one made by Ford Motor, which last month extended offers to its 54,000 workers represented by the United Automobile Workers. Chrysler has offered buyouts to workers at certain plants.

G.M.’s chief financial officer, Frederick A. Henderson, called the buyouts “an important step” in the reorganization of the troubled domestic auto industry.

The company has already cut nearly 40,000 United States jobs in the last two years through buyouts and early retirements and has closed a number of plants to bring production in line with weaker demand for its vehicles.”

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