DETROIT (AP) — Blue-collar workers at General Motors and Chrysler have about two weeks to make a difficult choice: Stay on the job and face layoffs or possible wage and benefit cuts, or take cash to leave, only to risk seeing the money tied up in court if their company files for bankruptcy protection.
The murky government-funded future of the two wounded automakers is making it particularly tough to make a decision about their latest buyout and early retirement offers, and that’s hampering the companies’ efforts to further pare their work forces.
“I keep going back and forth about it,” said Charles Vega, who commutes about 60 miles each way from Toledo, Ohio, to a Chrysler pickup plant in the Detroit suburb of Warren.
“I could wind up having a job and not be able to pay my bills. I can’t afford to work for $15 an hour, to drive all the way up there and work.”
GM workers have until March 24 to make a decision, while Chrysler’s deadline is March 27.
Both companies are negotiating with United Auto Workers for contract concessions required by the terms of their government loans. Together, General Motors Corp. and Chrysler LLC have accepted $17.4 billion and say they need up to $21.6 billion more.
While the companies prefer to avoid a bankruptcy filing, it’s up to the Obama administration’s auto task force to decide whether they’ll be forced into Chapter 11 to restructure their debt, rewrite their union contracts and emerge as healthy companies.
Vega, 48, who has worked for Chrysler 24 years, can get $75,000 cash and a $25,000 voucher to buy a car if he takes the buyout option to leave the company. Workers eligible for early retirement can get $50,000 and a $25,000 car voucher.
So Vega, a production worker whose base pay is about $60,000 per year, is considering the $75,000 buyout and trying to get another job. But after taxes, the money buys him only about a year of pay, and rising unemployment means job hunting has gotten tougher. So he’ll probably stay on and run the risk of Chrysler going into bankruptcy.
“I probably won’t do it,” he said of the buyout. “I’ll probably just go down with the company.”
GM’s offers, to nearly all its UAW-represented employees, are less lucrative. The Detroit company’s offers include $20,000 cash and a $25,000 car voucher.
“We’ve had quite a few people (who) have inquired, but they’re waiting for some information to come out of Detroit before they make the final move,” said Jim Graham, president of a UAW local at a GM small-car plant in Lordstown, Ohio.
Gary Chaison, an industrial relations professor at Clark University in Worcester, Mass., said he doesn’t expect this round of buyouts to draw many workers. Previous offers have depleted the pool of people willing to leave, and the offers aren’t as good as in the past, he said.
Workers also fear the unknown, Chaison said. They don’t know what their wages and benefits will be if they stay and risk losing everything if they take the offers.
Chrysler’s roughly 26,800 UAW production workers make about $29 per hour, while GM’s 62,000 UAW-represented workers make about $28.