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GM, Chrysler offer new buyouts
'We had heard rumors a buyout was coming, but our members were truly expecting a little more than this,' the union president said. 'Especially since Chrysler's was much bigger.'
Chrysler is offering $50,000 cash and a $25,000 vehicle voucher.
Details on the buyout offers come a day before automakers announce January auto sales and as GM and Chrysler try to cut costs and trim debt to comply with a provisions in their federal loan packages. The offers also come a week after GM announced it is cutting 2,000 jobs in Michigan and Ohio because of weak demand affecting the U.S. auto industry.
GM and Chrysler must file restructuring plans by Feb. 17 and show significant progress in becoming viable companies by March 31 or the U.S. Treasury Department could recall the loans.
GM's restructuring plan includes eliminating up to 31,000 hourly and salaried workers.
The Detroit automaker had 96,000 workers in December and the goal is to have 65,000 to 75,000 workers by 2012.
GM and Chrysler want to replace more hourly workers with lower-paid workers. GM negotiated a two-tier wage system with the UAW last year that pays many new hires in about half what current workers earn with no pensions.
Workers who leave can be replaced by new hires paid at about half the wage, or $14 an hour and less-extensive benefits, under the terms of the collective agreement with the UAW.
That helps heed government calls to bring Detroit Big Three wages on par with those paid by foreign automakers at non-unionized plants in the U.S., as part of viability plans. The conditions also are attached to the $4 billion in loans Chrysler has been granted and the $3 billion it still seeks.
Two-tier wages were negotiated in 2007 but there has been little need to hire new workers at the lower wages given the downturn in the economy that has led to a series of production and capacity cuts.
Effective today UAW members are being offered buyout programs similar to those made available in the second half of 2008 when car sales began to fall off dramatically.
Many UAW members 'raised concerns that more of our members may have accepted Special Packages or explored other options if they had knowledge of the changes in the CBA (collective bargaining agreement) that may impact their current situation, i.e. elimination of the job bank, etc.,' General Holiefield, vice president and UAW director of the Chrysler Department said in a letter to union officials.
That led to an agreement with Chrysler to offer similar programs now, with a deadline of Feb. 25, to employees of all but the Kenosha Engine Plant in Wisconsin.
While many of the packages now available are the same as those offered last year, the most significant change is the substitution of a car voucher as part of the final sum. For example, an incentive of $70,000 from the pension plan in 2007 has been changed to an offer of $50,000 cash and a $25,000 vehicle voucher in this round.
This has the added benefit of potentially boosting auto sales for Chrysler, which saw its U.S. sales fall 53 percent in December.
Chrysler is offering $50,000 cash and a $25,000 vehicle voucher.
Details on the buyout offers come a day before automakers announce January auto sales and as GM and Chrysler try to cut costs and trim debt to comply with a provisions in their federal loan packages. The offers also come a week after GM announced it is cutting 2,000 jobs in Michigan and Ohio because of weak demand affecting the U.S. auto industry.
GM and Chrysler must file restructuring plans by Feb. 17 and show significant progress in becoming viable companies by March 31 or the U.S. Treasury Department could recall the loans.
GM's restructuring plan includes eliminating up to 31,000 hourly and salaried workers.
The Detroit automaker had 96,000 workers in December and the goal is to have 65,000 to 75,000 workers by 2012.
GM and Chrysler want to replace more hourly workers with lower-paid workers. GM negotiated a two-tier wage system with the UAW last year that pays many new hires in about half what current workers earn with no pensions.
Workers who leave can be replaced by new hires paid at about half the wage, or $14 an hour and less-extensive benefits, under the terms of the collective agreement with the UAW.
That helps heed government calls to bring Detroit Big Three wages on par with those paid by foreign automakers at non-unionized plants in the U.S., as part of viability plans. The conditions also are attached to the $4 billion in loans Chrysler has been granted and the $3 billion it still seeks.
Two-tier wages were negotiated in 2007 but there has been little need to hire new workers at the lower wages given the downturn in the economy that has led to a series of production and capacity cuts.
Effective today UAW members are being offered buyout programs similar to those made available in the second half of 2008 when car sales began to fall off dramatically.
Many UAW members 'raised concerns that more of our members may have accepted Special Packages or explored other options if they had knowledge of the changes in the CBA (collective bargaining agreement) that may impact their current situation, i.e. elimination of the job bank, etc.,' General Holiefield, vice president and UAW director of the Chrysler Department said in a letter to union officials.
That led to an agreement with Chrysler to offer similar programs now, with a deadline of Feb. 25, to employees of all but the Kenosha Engine Plant in Wisconsin.
While many of the packages now available are the same as those offered last year, the most significant change is the substitution of a car voucher as part of the final sum. For example, an incentive of $70,000 from the pension plan in 2007 has been changed to an offer of $50,000 cash and a $25,000 vehicle voucher in this round.
This has the added benefit of potentially boosting auto sales for Chrysler, which saw its U.S. sales fall 53 percent in December.