GM workers face tough buyout decision
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GM workers face tough buyout decision
KAI RYSSDAL: The CEO of Delta Airlines had some bad new for its pilots today. Bad, but not entirely surprising. Gerald Grinstein said the company would be in bankrutpcy court Monday, asking a judge to let it end its pilots’ pension program effective Sept. 2. Delta’s trying to save billions of dollars and work its way out of Chapter 11.
General Motors has a similar problem. It’s not actually bankrupt. But it’s desperate to save money. Tens of thousands of General Motors workers have just over a week — until June 23, actually — to decide whether they’ll be part of one of the biggest buyouts in corporate history. GM wants to cut health care costs and trim 30,000 hourly jobs by the end of 2008. More from Mhari Saito.
MHARI SAITO: Jennifer Kunkel hates her job slinging metal on the nightshift at a GM plant in Parma, Ohio. Her job is to take newly pressed metal pieces and put them in a basket. But her father worked at the plant and she was born and raised here. So Kunkel, 30, wasn’t even considering the buyout. Now after talking to co-workers, she’s not so sure.
JENNIFER KUNKEL: A lot of them are just taking it and saying the hell with it. Everybody says it is the greatest feeling when you sign your name.
GM is offering workers willing to give up benefits and who’ve been with GM at least 10 years buyouts of $140,000. Workers with at least 30 years in can take $35,000 and leave with full retirement packages. Interest is growing as the deadline approaches.
DICK KISTEMAKER: Pretty much the first thing they ask is “Are you going? Are you going?”
Dick Kistemaker says the buyout is the talk of Parma’s United Auto Workers union hall. He is one of many eligible for an early retirement under the plan. But this 62-year-old is staying.
KISTEMAKER: I’m not ready to retire yet. I’m financial secretary for the union at UAW 1005 here and I still feel they need some people that have been in the trenches for a while to show some of the new people what has to be done.
GM’s buyout plan comes after the world’s largest automaker reported a $10.6 billion loss last year. Industry watchers expect at least 20,000 workers to take the buyout. Here in Parma, union leaders think one in four of the plant’s 2,200 workers will go.
TODD HANNA: If you go into Cape Coral . . . let’s go to Fort Meyers.
Todd Hanna’s cruising real estate websites to see what he can afford with his $140,000 severance. The 36-year-old bachelor is living among boxes and waiting to leave for a new job in Florida.
HANNA: It would have taken a certain dollar amount in order for me, myself, to leave General Motors and they hit it. They hit it exactly. And really with no ties here, nothing to keep me from transplanting my life 1,500 miles, it’s just too good of an opportunity to pass up.
Workers concerned about losing their medical insurance don’t find the choice so easy. Karen Caponi is a financial advisor with New York Life working with Parma’s autoworkers.
KAREN CAPONI: These people have always felt job security which is enormous to them and now that job security may not be there. So I think that that comes with some of the fear of saying, “Gee, you know Karen, maybe I need to consider taking the buyout and going somewhere else.”
That decision is weighing heavily on Jennifer Kunkel. On her kitchen table sits a home appraisal and freshly printed resumes. She’s thinking about going back to school and becoming a teacher.
KUNKEL: What happens if I just can’t find anything and they’re like, “Well, you’ve just been in a factory, you’re just a dumb girl.” You know? And if I don’t make it, do I really want to go back with “Hey, mommy and daddy, let me in for a little bit till I get on my feet.” Do I want to go back there? No.
Financial pressures are forcing GM to downsize or cut 12 plants and slash $7 billion in costs by 2008. Though the Parma plant isn’t on an official short list, Kunkel’s taking a gamble if she decides to stay at her job of nine years.
KUNKEL: There’s security there. You know? And then if anything did happen to that plant, I don’t know. Then I go back to my degree. I don’t know what to do!
That’s the dilemma for all GM workers trying to decide by June 23rd. Even if they do sign up, they have until June 30th to change their minds.
In Cleveland, I’m Mhari Saito, for Marketplace.
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