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WSJ: GM Makes Sweeping Buyout Offer


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GM Makes Sweeping Buyout Offer

Deal With Delphi, UAW

Lets Auto Maker Slash

Unionized Work Force

Clearing Out a Generation


March 23, 2006; Page A1

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General Motors Corp. reached a landmark buyout and early-retirement program yesterday with the United Auto Workers and parts supplier Delphi Corp., marking a major step toward shrinking the unionized North American auto industry.

But for GM, it is not the end of the painful overhaul facing the company after nearly two decades of losing ground to Asian and European rivals.

Under a complex deal worked out in weeks of talks, GM agreed to finance early-retirement packages and buyouts to be offered to as many as 131,000 GM and Delphi workers -- including all 105,000 of GM's current UAW-represented employees in the U.S. The buyouts would range from $35,000 for those with the most service to $140,000 to certain others further from retirement age.

The buyout plan is one of the largest in U.S. corporate history. In effect, GM is offering to take off the assembly line a whole generation of workers hired in the 1960s and '70s when the company still dominated the U.S. auto industry.

But how many will sign up to leave is a big question mark. And even if many do, GM Chairman and Chief Executive Officer Rick Wagoner still faces a series of challenges that the big labor deal won't solve. In 4 p.m. composite trading on the New York Stock Exchange, GM's stock finished up one cent, at $22.01.

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