As General Motors Corp. and Delphi Corp. shed thousands of hourly workers through buyouts, they are scrambling to hire temporary workers to keep their production lines running.
More than 35,000 hourly workers at GM and bankrupt supplier Delphi were expected to accept buyout offers of $35,000 to $140,000 by the time the deals expired Friday.
Both companies said they wouldn’t know how many workers are leaving until early next week. GM issued a statement late Friday that Chief Executive Rick Wagoner would announce preliminary results in a press conference Monday.
Neither company would say how many temporary workers they have hired, but in some plants, new faces could outnumber the familiar ones when the buyouts are completed.
At Delphi’s Saginaw, Mich., steering systems plant, more than 1,500 of the 3,400 members of United Auto Workers Local 699 had signed up for buyouts by Thursday. Local 699 President Mike Hanley expected the number to grow to 1,900 by the Friday afternoon deadline.
More than 300 other workers have transferred to GM plants from Saginaw, and hundreds more have applied for transfers, he said. “We’re probably looking at 2,500 new hires if they replace everyone who leaves,” Hanley said.
The UAW estimated last week that nearly 25,000 workers at GM and 9,000 at Delphi had accepted buyouts. Reuters, quoting a UAW local official, reported Friday that the number could go as high as 40,000. Workers who accept the offers have until June 30 to change their minds.
More Delphi workers could leave under a new offer, announced June 16, of up to $140,000 for those with more than 10 years on the job. No deadline has been set for those buyouts.
Many who accept buyouts will depart July 1, but Delphi and GM will require some to stay until the end of the year or until replacements are ready.
“They’re not all necessarily leaving right away so they can train new workers before they leave,” Delphi spokesman Lindsey Williams said.
Delphi is replacing UAW members, who make about $27 an hour, with temporary workers who are paid $14 an hour and don’t receive benefits. After 90 days, temps are eligible for full-time status. Under the UAW contract, wages jump to about $16 an hour and they can receive limited benefits if they become full-time.
GM also is hiring temps, at about $19 an hour, and filling openings from other sources. Spokeswoman Katie McBride said GM doesn’t anticipate production problems because of a worker shortage.
“Some of the workers who retire will be replaced by workers from Delphi, some from the jobs bank, some from other GM plants who want to relocate and some from temporary hires,” McBride said.
The jobs bank is the industry’s term for UAW members on permanent layoff, such as those from a GM plant in Oklahoma City that closed this year.
Hanley, the UAW official, said his plant has not seen production problems. He read that GM has taken steps to anticipate a possible production glitch caused by workers leaving, but he added, “There probably is only a certain amount of glitches you can anticipate.”
GM will close 12 North American plants by 2008 and likely will exceed its goal of eliminating 30,000 union jobs by then.
“The numbers are amazing,” Burnham Securities analyst David Healy said, estimating that GM spent $81 an hour on union workers last year, including benefits and pensions.
With temp workers getting $19 an hour, Healy said: “The savings are astronomical. This is what got [Wall Street] excited about the deal two weeks ago.”
Merrill Lynch analyst John Murphy reiterated his “buy” recommendation on GM stock Friday, saying, “The company is successfully accelerating its restructuring efforts through its buyout program, which will result in significant savings in the near term.”
GM’s shares lost 30 cents in New York Stock Exchange trading Friday, closing at $26.97.
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