AUTO NEWS
PROGRESS ON TURNAROUND: Wagoner: GM is close to draining jobs bank
August 19, 2006
BY JOE GUY COLLIER
FREE PRESS BUSINESS WRITER
In Royal Oak on Friday on the eve of the Woodward Dream Cruise, GM Chairman and CEO Rick Wagoner was upbeat about GM's progress. The Chevy Camaro concept car will become a production model in early 2009. (KIMBERLY P. MITCHELL/Detroit Free Press)
General Motors Corp. Chairman and CEO Rick Wagoner said Friday the company should deplete most of its jobs bank employees by the end of the year.
The jobs bank contains workers who are not needed for production but continue to receive almost full pay under the UAW contract.Wagoner would not say directly that the jobs bank needs to be eliminated in 2007 contract negotiations with the UAW. But he did say that it hampers GM's bottom line.
The company does not publicly disclose figures on the jobs bank,
but industry analysts have estimated about 5,000 GM workers are in the bank at a cost of $500 million a year."It's an area where the way it's structured it does lead to uncompetitiveness," Wagoner said. "We'd like to find ways to reduce that competitive disadvantage. I would say simply there's more than one way to skin that cat."
Speaking at a news event in Royal Oak on the eve of the Woodward Dream Cruise, Wagoner was upbeat about progress on GM's turnaround plan. With a set of police escorts around him, Wagoner drove along Woodward Avenue to Athens Coney Island in a silver Chevy Camaro concept car, which will become a production model in early 2009.
The depletion of the jobs bank would be good news for GM because it would indicate its hourly workforce more closely matches what it needs to make the cars and trucks demanded by the market. It would not have to pay for plant workers who are not needed for building cars and trucks.
Aside from a couple of sites, the jobs bank is being exhausted rapidly, Wagoner said.
The effort is being helped as the 35,000-employee attrition program takes hold. About 18,000 hourly employees already have left as part of the buyout program, Wagoner said.
The rest will be leaving at a "reasonably steady" pace and a large chunk will leave at the end of the year, he said.
Sales are stabilizing and the company is being rejuvenated with new models on the way, such as the Camaro, Wagoner said.
"It kind of adds an exclamation point to our commitment to make great cars and trucks," Wagoner said about the Camaro.
Wagoner declined to speculate on the impact of Ford's production cuts, also announced Friday. The U.S. auto industry continues to be pressured by high gas prices, which are shifting consumer demand, he said.
"We're staying focused on what we need to do at GM," Wagoner said. "As far as Ford's actions, I think they speak for themselves."
He also would not provide details about GM's talks with Nissan Motor Co. and Renault SA about a possible alliance, other than to say that he gets regular reports on the talks.
"This is still fairly early into the process," Wagoner said.
Delphi Corp., a spin-off from GM and its biggest supplier, does appear to be making progress working its way through bankruptcy proceedings, he said.
"It's a big deal," Wagoner said. "These are big, tough issues. Even smaller bankruptcies take longer."
Contact JOE GUY COLLIER at 313-222-6512 or
jcollier@freepress.com"
. The only thing I had to replace was an alternator along with the usual service items.
