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DETROIT - For a U.S. auto industry already undergoing a sea change, General Motors Corp.'s offer to buy out more than 100,000 autoworkers will only bring more upheaval that could result in weaker unions, thousands of jobless Baby Boomers and higher sticker prices on vehicles, eventually."We're going to see major, major changes in the way vehicles are manufactured and who's going to be doing the manufacturing," said James McTevia, a Detroit-area restructuring consultant. "We haven't seen the last of it yet."
Under GM's plan — one of the largest corporate buyouts in history — GM is offering between $35,000 and $140,000 to 113,000 U.S. hourly workers as part of its goal of cutting 30,000 jobs by 2008. GM also will bankroll early-retirement buyouts at Delphi Corp., its former parts division and major supplier. Up to 17,000 hourly workers at Delphi could be eligible for a $35,000 payment to retire.
GM and Delphi haven't said how many workers are expected to take the deal, but JPMorgan auto analyst Himanshu Patel predicts as many as 39,000 GM workers could leave the company. McTevia said that will mean many autoworkers in their late 40s and early 50s will be retiring even though they have many productive years left.
While those workers will get pensions and health care benefits from GM, their benefits may not be as rich as they once were. GM is currently seeking federal court approval for a plan to make retirees pay more for their health care, and could continue to whittle away at those benefits in the future.
"What are these people going to do in an economy that's changing when their experience is automotive-driven?" McTevia said. "How are they going to fit into our society?"