General Motors announced today that they will be offering buyout packages to their entire U.S. hourly workforce – 74,000 workers. These “please leave” packages will offer between $45,000 and $65,000 to leave the property now. And that’s with continuing full pension and health care coverage. If you’ve been there 10 years and you’re willing to give that up as well, you can just grab a cool $140,000 and ride off into the sunset.
Here’s where hard negotiating has gotten a GM worker today. The current UAW member at GM has an average base of $28.12 an hour – but, with the cost of benefits, including pension and health care costs, that hourly figure rises to $78.21, according to the Center for Automotive Research. So do the math on that one. At just a normal 40 hours a week, that translates out to $162,676 annually. Hey I know physicians and dentists who don’t make that kind of money.
Of course that also put General Motors on track to post their worst year in history in 2007 – reporting a net loss of $38.7 billion. Okay, you may not think it’s “fair” to be eliminating workers in order to bring in new people at less than half the cost. But if you think you are owed “security, predictability and retirement” you’re going to be disappointed. No company can survive a business model with this kind of loss and where labor costs are so disproportionate with the rest of the world.
If I were a GM worker today I would be asking some questions like these:
- Has this been my dream job – the fulfillment of my purpose here on earth?
- How likely is it that I will have any job here two years from now?
- Is it reasonable to think that any company can survive with a one-year $38.7 billion loss?
- Can I come up with 4-5 possibilities for ways I could invest $140,000 to see a good return?
- Do I have valuable skills that could benefit any number of other companies?
- Is this my golden opportunity to start my own venture?
- How fast can I get my check?
Principles from No More Mondays
Tags: buyout, General Motors, severance
Dan Miller's Blog 
February 13, 2008 at 1:49 am
Great post Dan! I have a relative here in OKC was laid off at GM a couple years ago. They kept striking for more benefits and pay and then wondered why they got laid off when the plant closed.
February 13, 2008 at 8:19 pm
Dan,
I new a man who worked at Chrysler for 30 years. He was 18 when he started and “retired” at 48 years of age with full benefits package for life. At 75, he is still getting this deal.
Those days are long gone!
February 15, 2008 at 8:40 pm
They need to get rid of the union. It’s days have passed and it’s not a sustainable business model.
Great opportunity for those that see it.
February 15, 2008 at 9:12 pm
The unions have provided safe working conditions, 40 hour week, and many other advantages to workers. But they have pushed to hard to pay unskilled labor a high wage.
February 15, 2008 at 9:43 pm
From what I know, i am not a fan of labor unions. I was in one in my early working days when I worked for a grocery store. They give their members a sense of entitlement. After I am here x years, I am entitled to this simply because of the time I have put in. In my career as a software engineer, if I don’t continue to produce good quality work, I won’t be entitled to employment at all, let alone a raise or increased benefits. The unions breed a culture that shields its members from the work ethic that drives American businesses.
February 15, 2008 at 9:44 pm
My husband worked at a GM plant for 28 years-hated it most of the time…his mental/physical health were adversely affected- as he had a nervous breakdown. The only “good” thing was his medical benefits. Dan is so right—do what you love or get out before that happens to you!
February 15, 2008 at 11:18 pm
The company’s well within its rights to ditch these employees. I’m sure, after all, that GM never received any huge tax breaks that were sold the American people as being a good idea because they would allow GM to create more jobs! While the company was losing its billions because of these $28/hour employees’ inconsiderate tendencies to take the pay and benefits that were offered to woo them into creating a successful company, I wonder how much the top execs were bringing down each year? (The average CEO today “earns” 400+ times his employees’ mean wages.)
Dan, it’s true that these guys should take their lemons and make lemonade, if possible, but don’t try to make the company out to be so saintly. I won’t say that no one is fooled by that type of rhetoric, but no thinking person is.
February 16, 2008 at 12:07 am
Dan,
I am a former GM salaried worker who took a buyout after almost twenty years.. Sounded like a fabulous idea at the time, although it was a different package. Living in Southeast Michigan, the real estate market tanked and I was unable to sell my house and move on. That was a surprise trap and had a bad ending, but I’ve never been sorry one single second that I left. It had become totally the wrong place for me to be.
February 16, 2008 at 2:44 am
I have no empathy for any of them in the industry. They have nobody but themselves to blame. Try to live in the REAL WORLD by taking a risk by going to school or starting a business and praying that you can see the benefits of that choice in an environment where HARD WORK and EFFORT is demanded and (maybe) rewarded. No union to protect laziness and substandard quality while getting paying how much? No wonder a vehicle costs so much!
February 16, 2008 at 3:08 am
As a union worker at a large delivery company(dare to guess which one) I am a highly paid worker whose job is always competing with what sanlty I have left. Its like all those little soldiers walking behind the wicked witch of the west in the Wizard of Oz…ooollle -o e-ollee -o…… My advise to those Gm People:run…run like the wind!
February 16, 2008 at 1:53 pm
My husband is a current GM employee, with over 30 years of service. He’s a very hard worker, whereas many in at his plant are not. Regardless, they’re paid the same and receive the same pay increases year after year. This is a horrible business model, and I feel that the union had it’s place at one time, but no more. However, I have a different spin on the inflated wages the employees have been paid. We have several friends, who either work or worked at the plant, who have sent their children to college. These children aren’t bogged down with student loan debt and most of them are highly successful, very productive citizens who have not followed their in their parents’ footsteps, becoming union workers. The parents have also been very smart with their money in other ways, and have retired with much more than dignity. Why do I bring up these points? Because both the retired parents and their children are not burdens to our society. Quite the opposite. They’re giving back to society and this does this nothing but help our nation’s economy, which further promotes the notion of make your own way, successfully; Dan’s way!
February 16, 2008 at 3:29 pm
My family is on the other side of the spectrum. My husband is hired in as a contract worker for GM. That means he works with union employees but makes less than half of what they are making and has awful benefits; but doing the same work as them. It is terribly unfair. I agree that they are making too much and not doing enough work and bringing the company and our economy down. Get ’em out of there!
February 16, 2008 at 3:46 pm
I believe this is a good time to evaluate all possibilities and seeing if what they are offering is going to sustain and/or finance. Will this offer help maintain your current living situation or as one gentlemen put it, will it become a trap. I understand what GM is doing and why but why leave out the executives and there high salaries. Whatever there going to do; just be fair to everyone involved. I’m currently in a union job I really wish I didn’t have to go to work at everyday but until what I love began to pay of and exceed what my current jobs pays. I have to do what I have to.
February 16, 2008 at 4:53 pm
I have 29 years with GM/Saturn. ONE MORE YEAR! Yes, we get paid well. BUT it didn’t happen overnight. No, It’s not my dream job, but when you have children and bills, it’s very difficult to leave a company like that who has such great pay/benefits. I paid dearly with my blood, sweat & tears over the years. The possibilities of still having my job 2 years from now is good! It has been documented that working in the auto business is feast or famine. But because of the Union, we continue to get paid even if we aren’t working. That, my friend is a HUGE benefit. Do you have that where you work? I didn’t think so! Say what you want about the auto industry and Unions, but I have benefited greatly from it the last 29 years! And I will continue to do so EVEN after I retire at the age of 51!
February 16, 2008 at 10:33 pm
Here is a story worth reading, though a year old.
http://news.bbc.co.uk/2/hi/business/6346299.stm
I am not involved in the auto industry. It is sad in a way to see that a Japanese company is in position to dominate well into the future. But they pay very well and do that without the union junk.
Sorry, NOTHING is guaranteed and if you think that you will always have security even after you retire you are in for a rude awakening. If GM was to totally go under, retirement benefits are never guaranteed forever.
To get paid when you don’t work is wrong. Sounds like socialism….will never produce long term true prosperity.
February 17, 2008 at 6:18 pm
Toyota pays as well at GM, and its employees don’t seem to hate their employer who provides these incredible benefits. Why do most union auto-workers hate their employers? I think it is the union attitude, and it is why the US automakers will end up being insignificant. No company can succeed in the long term with employees that hate working for them. But as Dan would say, why would anybody work for someone they hate?
February 17, 2008 at 6:31 pm
I was salaried in the petrochemical industry. My job was eliminated at the end of 2003 and contract lab workers were hired at lower pay to do our work. As I continued in my position over the years I felt I contributed far more and was much more innovative as time went on. I knew I was contributing more, but my management didn’t value what I was doing and I became very depressed. When they came out with a buyout I signed up quick. We got a great buyout package, but it doesn’t last forever.
I’m still struggling financially because I didn’t know what I REALLY wanted to do with my life. I started a business that failed and has me in a ton of debt, but I’m working on that. I have a fabulous part-time job tutoring math and science in the evenings for $19/hr, and I am working very hard on my blogs and becoming a writer. I get some freelance work, I get paid for article submissions to certain sites, and I make money from affiliate product sales and hosting advertising on my blogs. It’s slow going but the work is worth it. It’s beginning to pay off and I can see where it will continue to grow much faster than I could ever have imaged even 4 short months ago.
Dave Ramsey’s show turned me on to the “48 Days” book and workbook and I bought and devoured “No More Mondays” when it came out. Being bought out was the best thing that’s ever happened to me because I’m finally doing things I love, and I’m a much better person to be around. No, it’s not all fun and games, but I love 95% of it 100% of the time. I set my own schedule and I’m free to spend more time with my son, family and friends. If I want to take a mid-morning nap, I do.
I love working with students and teaching them from a different perspective than their teachers (academic vs. real world experience). Having such a different background and a much different perspective on life than school teachers (another group that feels entitled, but for far less pay), I can reach many students others have given up on because they “just don’t fit in”. I don’t want them to fit in. I want them to be themselves and I work with that, not against it. My students love me so much, and my name has gotten around so now it’s tough to get on my schedule.
I haven’t said anything about loving my job since I was a camp counselor in college over 20 years ago.
When my writing finally starts paying all the bills, I’m considering tutoring underprivileged kids for free. Right now, I pretty much write for free. I’ve learned if I would do it for free, that’s what I should be doing for a living. I now see virtually no retirement in my future. I plan to work when I like from my notebook computer and take off when I like. Since I started this I haven’t worked a single day. I’ve been paid to play!
February 17, 2008 at 7:12 pm
If the buy out are successful and the workers are replace with new workers for half the pay , I hope they share savings with the comsumers
February 18, 2008 at 9:37 pm
One respondent said he hoped the auto companies will share their buyout savings with consumers; the fact is, they’re sharing their buyout EXPENSES with taxpayers! Every one of these plants has traded the promise of “lots of good jobs” for tax breaks at every level along with costly concessions in various services. (A GM plant in a town not far from here required the town to improve roads, extend water and sewer services, and add extensive new public safety services and equipment; this is not unusual.)
When a company loses tens of millions year after year, and in return receives *additional* tax breaks and direct assistance, it’s pretty clear that those of us who *don’t* work for Ford or GM are the ones with a right to shout “Unfair!”
February 18, 2008 at 10:52 pm
I agree that Unions have exceeded their usefullness. The presence of OSHA and rights given to every American have done away with the need for unions. Take the buyout and go get a new job you love!
February 19, 2008 at 4:23 pm
GM is so out-of-whack that they lose an average of $2000 per vehicle they sell. They make money on large trucks and SUVs, and loose big on the under $30K cars. That is why they are losing money overall, and the savings from replacing workers will not actually lower their car prices but will allow them to break even or possibly profit from car sales at the current prices.
February 23, 2008 at 12:29 pm
Hi Dan.
I have been working for so many years, I do not even want to count, done the wrong thing about my life. But one thing I am sure of is, that God is the only one that is able to provide and be truthful. So get out if that is the calling and do what you always wanted to in the name of the Lord.
I found someone special and He guide me through as off today I found myself wanting nothing at all.
Count your blessings and keep on, you will find out what the Lord has in store for your life and will be contempt. Pray, that is the answer and give Him your future.
In HIs love.
Maria