GM Workers Worry About Future 3/23/2006

GM Workers Worry About Future

On Plant Assembly Lines
And at Kitchen Tables,
Worry About the Future
'I Got a Sour Taste About It'
By GINA CHON, KRIS MAHER and COREY DADE
Staff Reporters of THE WALL STREET JOURNAL
March 23, 2006; Page A1

Soon after General Motors Corp. announced its massive buyout plan yesterday, news -- and rumors -- began sweeping the company's truck-assembly plant in Pontiac, Mich.

For 52-year-old Larry Walker, the effect was unsettling. A 33-year veteran of the plant who has long planned to retire at 55, Mr. Walker would keep his benefits if he leaves, but receive a payout of only about $35,000.

That may not be much after taxes, he said, especially in an unexpected health-care emergency. He had other concerns too, among them whether he will be able to continue helping out his son, who recently finished an 18-month tour in Iraq. "When I retire, I don't want to have to worry about working again because I can't make ends meet," he said.

For roughly 131,000 affected workers at GM and auto supplier Delphi Corp., yesterday's buyout offer was the start of a personal drama in an industry that, through years of ups and downs, has long been a stable, union-protected bastion of employment. Along assembly lines, in parking lots and around kitchen tables, workers spent the day sifting through the complicated and varying terms of the offer, calculating the value of their packages and weighing how the buyout will affect their lives.

For each, the decision to stay or go will depend on a variety of factors, from length of time with their company to prospects of new jobs or whether a spouse is employed with benefits. In broad terms, the buyouts being offered range from $35,000 for those with the most service to $140,000 to certain others further from retirement age. But there is plenty of fine print to weigh, not to mention personal factors.

While the United Auto Workers, the powerful union that represents most hourly workers among the big U.S. auto makers, helped negotiate the agreement, officials weren't giving much official guidance yesterday. Paul Krell, a spokesman for the union, said UAW Vice President Richard Shoemaker will brief local union leaders next week.

"We will be providing information on how to go about deciding when one of these options is right for members," Mr. Krell said. "People will have both the time and information to make a very well-informed decision." Still, the pressure is on: GM said offers will go out immediately. Workers will have 45 days to accept and then seven more days if they want to reverse themselves.

Some were able to make the decision quickly. Bob Mercado, 51, said he would happily accept his buyout to get away from his job in the paint-repair shop at the Pontiac plant -- where he breathes in paint fumes all day.

That will mean giving up income of about $100,000 a year in exchange for the package with a $35,000 lump-sum payment. Still, he said, "I'm tired of coming here and this will allow me to enjoy life and spend more time fishing." None of his three children plan to attend college, he added, so that won't be an issue.

For Terri Nichols, a single mother with a mortgage, the buyout simply wasn't an option. Ms. Nichols, a 47-year-old press-metal technician in Indianapolis, has been at GM for six years, leaving her eligible for a $70,000 payment -- but "that's just a little over a year's income," she said. She also would be forgoing all her benefits.

Ms. Nichols said staying is a difficult choice, too, given GM's problems, but she hopes "to ride out the storm." "I've heard there's going to be a lot of changes" she said. "I don't think they're going to be good. From what I'm hearing they're going to cut way back."

At some plants, reactions to the offer underscored an age gap. Gino Collins, a 16-year veteran at Delphi's Chassis Kettering plant in Dayton, Ohio, said it was clear during a morning of discussion that the consensus among younger workers with at least 10 years of service was to take the buyout. "They know this place isn't going to be here for much longer anyway," he said. "When it's through, there won't be enough young people at this plant to turn a light on."

But, he said, his own choice is much tougher. If Mr. Collins, who is 58, took a buyout, he would get a lump sum of $140,000, but have no benefits. But if he stays, he said, he is worried that Delphi would look to cut his current wage of $27 an hour, costing him even more. "This is only the first phase," Mr. Collins said. "I want to see how much they want to decrease my wages before I make a decision."

At GM's Doraville, Ga., assembly plant, just north of Atlanta, many workers greeted the news with relief. GM has slated the plant for closure in 2008, and veterans have been reluctant to move away to take jobs at other plants. Because of that, the buyout was taken as a windfall.

But Chris Knight, 40, who has put in 18 years at the plant, said the news left him with bittersweet emotions.

Mr. Knight is well-positioned compared with some of his colleagues. With his experience, he stands to earn a $140,000 payout. He isn't married and has no dependents. He has side businesses, too, including selling used pickup trucks at his small neighborhood dealership, renting out six homes he owns and co-owning a beauty parlor.

But Mr. Knight said it would be hard to lose his steady income of about $65,000 annually, and benefits. "Where is anybody going to find a job paying $28 an hour with [only] a high-school diploma?" he asked.

Moreover, he said, he is sad to leave behind nearly two decades of banging dents out of vehicles and sharing beers and burritos with co-workers at a nearby restaurant. "I got a sour taste about it right now," he said. "I hate to see my home plant go. I think it's a bum deal, really, after you've spent so much time with the company." In the end, he said, he is "probably leaning toward taking the money and leaving."

For Doug Hanscom, the decisive factor may prove to be debt. The 53-year-old said he didn't think he would take the buyout even though he hasn't been on a plant floor since last May, when GM shut his truck and bus plant in Baltimore.

Since then, he has been pulling down a little more than $27 an hour as an enrollee of the company's Jobs Bank, under which GM pays salary and benefits to more than 5,000 UAW members whose jobs have been eliminated. He also has been taking classes in English and labor studies at the Community College of Baltimore County.

Still, with 10 more years of payments on his two-bedroom house in Dundalk, Md., and two more years on his Harley-Davidson motorcycle, he said he worries that one medical emergency could put both at risk. "I've got to have my benefits," said Mr. Hanscom, who will mark 29 years with the company in April. "One minor incident could bankrupt you. One hundred and forty thousands dollars could disappear in a week's time."

Instead, he said, he is hoping that enough workers take the offer to give him a shot at a job at a transmission plant in White Marsh, Md., about 25 minutes away from where he lives. "Hopefully this will give others incentive to retire and move my name up the list," he said.

---- Sarah Nassauer contributed to this article.

Write to Gina Chon at gina.chon@wsj.com, Kris Maher at kris.maher@wsj.com and Corey Dade at