Last November, I did a post about GM laying off 30,000 employees and closing 9 plants in an attempt to “increase profitability” within the company.

Today, I read this gem:

General Motors Corp., bankrupt auto parts maker Delphi Corp. and the United Auto Workers union have agreed on a plan to provide early retirement buyouts to union members and allow up to 5,000 Delphi union members to move to GM through 2007, Delphi said on Wednesday.

Delphi said 13,000 hourly union employees would be eligible for the buyouts, with some receiving lump sum payments of $35,000.

Under the terms of the deal, which is subject to approval by a U.S. bankruptcy court, GM has agreed to take on the financial obligations for the payments.

I know they say “some” will receive lump sum payments, but if all of them receive $35,000, GM will be doling out $455,000,000 to those employees, whom might not be GM employees.

It’s nice to see them doing well enough to pay out nearly $400 million to non-employees, and agree to hire 5,000 of those non-employees, all in the midst of a bankruptcy, which usually means a company is financially insolvent.

If I was one of those 30,000 who simply got a pink-slip, I’d be a little hot under the (blue) collar right about now.

UPDATE: This is a lot bigger than originally reported.

General Motors Corp. is offering its hourly workers as much as $140,000 each to leave the company as the embattled automaker made its latest effort to cut labor costs and end billions of dollars in losses.

GM announced an agreement with the United Auto Workers union Wednesday, although it did not give the details of the offer being made to all 113,000 U.S. hourly employees. But a source familiar with terms of the offer confirms those UAW members with 10 years or more service with the automaker will get $140,000 if they agree to forsake the retiree health care coverage that has become a crippling burden for GM.

Those with less than 10 years service time will get $70,000 if they leave without the health care coverage.

If ALL of GM’s 113,000 hourly employees took the buyout, and all of them had less than 10 year of service, the deal would cost GM $7.91 billion. Where does a company that has NO money to pay creditors come up with the money to “buyout” employees?

I guess I just don’t get it.

Technorati Tags: General Motors, GM, Delphi, retirement buyouts, hire, bankruptcy, lump sum payments, financial obligations

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