GM to UAW: Deal or No Deal?

[Guest Josh]

Is The Buy-Out That Big Of An Offer?

On paper, the buy-out that General Motors is offering to it’s 113,000 U.S. workforce looks pretty attractive. Workers with nearly 30 or 30 year or more are being offered a buy-out settlement of $35,000 plus full pension payout including benefits. Sounds like a tantalizing offer, does it not? Just think of what you could do with that $35,000. Where you could go? What you could buy? Imagine what college your child or daughter could go to with $35,000 sitting in the bank.

Sounds good, no great doesn’t it? General Motors and the UAW want you to think so. However, I say not so fast.

Lets take a look at this $35,000. First thing’s first. If you owe GM money say, for a car payment General Motors is going to take the money you owe them and subtract that from the $35,000 settlement. Factor in Uncle Sam and his grubby hands. Not to mention, the kicker in the entire deal. The UAW plans to take a “negotiators fee” (as best to reference it, at this point) for laying out the groundwork and working out the deal with General Motors and Delphi. The amount is not currently known, but we’ll say it will be $2,000 just for good measure.

So, let’s say you owe the General $10,000. The UAW takes it’s $2,000. That leaves us with $23,000. For good measure Uncle Sam wants $6,000. Your grand total for your buyout sits at $17,000. That’s twice than the buyout offer. Still considering it?

Right now, the average GM UAW worker probably brings home about $50,000 a year without overtime (believe me, there’s not much O.T. going on within the company). If a UAW member qualifies for full pension right now, if they retire, they’re looking at roughly $43,000 a year. A difference of $7,000 for an active UAW worker and a retiree.

By this math which I admit is a bit loose and depending on your situation. It’s easy to see that the $17,000 difference from a buyout would be made up within three years of being active on the assembly line.

Still such a great deal?

If so, I’ll steal a line from a new hit show I enjoy.

Deal or No Deal?

Next time, I’ll look at the guaranteed max exodus of UAW members and the impending worker shortage that General Motors is almost sure to be facing before the end of 2006.

[Snate]

Lets take a look at this $35,000. First thing’s first. If you owe GM money say, for a car payment General Motors is going to take the money you owe them and subtract that from the $35,000 settlement. Factor in Uncle Sam and his grubby hands. Not to mention, the kicker in the entire deal. The UAW plans to take a “negotiators fee” (as best to reference it, at this point) for laying out the groundwork and working out the deal with General Motors and Delphi. The amount is not currently known, but we’ll say it will be $2,000 just for good measure.

So, let’s say you owe the General $10,000. The UAW takes it’s $2,000. That leaves us with $23,000. For good measure Uncle Sam wants $6,000. Your grand total for your buyout sits at $17,000. That’s twice than the buyout offer. Still considering it?

They will have to pay all of the irregardless save for the "negotiators" fee which is probably something the people that are trying to "fight" for them are ripping them off for.

Right now, the average GM UAW worker probably brings home about $50,000 a year without overtime (believe me, there’s not much O.T. going on within the company). If a UAW member qualifies for full pension right now, if they retire, they’re looking at roughly $43,000 a year. A difference of $7,000 for an active UAW worker and a retiree.

Or take the money, retire early and find a part time job to work 20 hours a week to make up the 7K difference. Same money, less work.

[Guest Josh]

Or take the money, retire early and find a part time job to work 20 hours a week to make up the 7K difference.  Same money, less work.

<{POST_SNAPBACK}>

That's what I was looking for!! My Uncle is doing it right now, he took the last buy out from the General, yet....is still working!

Why work when you are RETIRED!!!

[Ghost Dog]

It might be a good Idea for the Delphi workers. But if I were the GM workers I'd be worried about not being there to vote in 07. I.E. retire now and in 07 have GM try to change the terms of retirement. With Retirees having no say. (Like last year)

[bowtie_dude]

Quit now and get paid for it, or get let go in Sept 07 and receive ZIP.

Seems like an easy decision to me.

[Snate]

That's what I was looking for!! My Uncle is doing it right now, he took the last buy out from the General, yet....is still working!

Why work when you are RETIRED!!!

I don't see your logic. Retire 3 years early and only make 43K versus making 50K working full time for the next 3 years. If you retire early you can get a part time job to make up the missing 7K per year and work less than you would if would stay full-time. By not retiring...you are really only working more for the same amount of money.

Either way you cut it, the UAW is getting a sweetheart deal. Sure I can see why they would be apprehensive about benefits getting slashed next year but they might as well expect it.

[jry]

i see your point josh. but when you have guys in skilled that have 40 and 50 years in and they won't leave or they think there is a better deal coming what do you do then. young guys with families getting kicked to the curb because old greedy guys won't go. holding out for something better. low productivity folks that should take the $$ and enjoy their golden years. but no, why? because their financial houses are not in order. they don't believe it but this IS the last and final offer. they think if they hold out, more $$ will be coming. the only lady left in this game is the one with the $2.00 brief case. this is the best deal they will see. uncle sam will take their % from the gross amount minus the UAW fee. probably 8 or 9 thousand. others are right as well. delphi guys should jump on this.

[Guest Josh]

Delphi workers will jump on it and the 5k flowback won't be realized.

I really think that GM is setting itself up for a worker shortage before the '07 contracts come up. They've said they want 30k from attrition, then offer this to the entire blue collar work force? Imagine if 60k take it. GM can't fill that many jobs at the production rate they are going now.