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N0KFQ > TODAY 12.02.16 17:56l 55 Lines 2577 Bytes #999 (0) @ WW
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Subj: Today in History - Feb 12
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Sent: 160212/1548Z 84410@N0KFQ.#SWMO.MO.USA.NA BPQ1.4.65
2008
GM reports record loss, offers buyouts to 74,000 workers
On this day in 2008, in an attempt to cut costs, struggling auto
giant General Motors (GM) offers buyouts to all 74,000 of its
hourly employees in the U.S. represented by the United Auto
Workers (UAW) union. The move came after GM lost $38.7 billion in
2007, which at the time was the largest loss ever experienced by
any car maker. (Two weeks later, on February 26, the loss was
adjusted by $4.6 billion, to $43.3 billion.)
GM offered its employees a range of buyout options, including a
$140,000 lump payment to those who worked at the company for at
least 10 years and agreed to give up their health benefits and
pension. GM's goal was to replace the employees who accepted
buyouts with new workers brought in at a lower pay scale. At the
time, a veteran GM worker (who belonged to the UAW) had an
average base salary of $28.12 an hour, but once such benefits as
health-care coverage and pension were added in, the cost to GM
jumped to $78.21, according to a report by CNNMoney.com.
Some 19,000 GM workers ended up taking buyouts; however, the
company's troubles were far from over, as gas prices reached
record highs in the summer of 2008 and auto sales continued to
slump amidst a growing global economic crisis. GM was criticized
for focusing too heavily on its sport utility vehicles and small
trucks and being slow to respond to an increasing consumer demand
for smaller, more fuel-efficient vehicles. In December 2008, the
federal government stepped in with a $13.4 billion loan to help
keep GM afloat (Chrysler, the third-largest U.S. automaker, also
received federal bailout funds). Also in 2008, Japan-based Toyota
surpassed GM as the world's largest automaker, a title the
American company, which was founded in 1908, had held since 1931.
At its peak in the early 1960s, GM made more than half of all the
cars and trucks purchased in the U.S.
In March 2009, President Barack Obama announced that in order to
receive additional federal aid and avoid possible bankruptcy,
both GM and Chrysler would be required to make deep concessions
and develop radical restructuring plans. Additionally, GM's chief
executive Rick Wagoner, who had held the top job since 2000, was
forced to resign immediately. Nevertheless, on April 30, 2009,
Chrysler filed for Chapter 11 bankruptcy and announced it would
enter a partnership with Italian automaker Fiat. GM filed for
bankruptcy a month later, on June 1.
73, K.O. n0kfq
N0KFQ @ N0KFQ.#SWMO.MO.USA.NA
E-mail: kohiggs@gmail.com
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