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GM Says 35,000 Take Buyouts

TSC Staff

General Motors(GM) confirmed Monday what most of Wall Street already suspected -- that its efforts to buy employees out of their contracts is meeting with more success than the company initially hoped.

GM said 35,000 hourly workers have agreed to buyouts or early retirement, key planks of the automaker's ongoing cost-reduction program. That's more than a quarter of the roughly 118,000 members of the United Auto Workers that are currently employed by GM.

Specifically, 30,400 workers took early retirement while 4,600 accepted buyouts, according to wire accounts of a Monday press conference. The accelerated uptake means GM should be able to achieve its goal of cutting 30,000 hourly workers a year early -- by Jan. 1, 2007, rather than Jan. 1, 2008.

The company also raised its estimate of the amount of annual costs it hopes to cut from its North American operations by $1 billion to $8 billion.

In regular trading Monday, GM shares gained 78 cents, or 2.9%, to $27.75. In the after-hours session, they tacked on another 30 cents to $28.05.