GM's Buyout Offer - Staggering Numbers
General Motors recently announced its plan to shed 30,000 workers. To achieve this goal, company is offering incentives to encourage employees to leave. Workers eligible to retire who leave now will get $35,000. Those who leave and sever all ties (i.e. forego retirement benefits) will get $140,000 if they have more than 10 years of service, $70,000 if less than 10 years of service. Doing the math, it seems staggering that a company could view spending BILLIONS of dollars as a way to save money over the long haul. This just goes to show the sheer size of GM, which lost over $10 billion last year alone. For more on this, go here.
This, by the way, is an effective use of an early retirement incentive program. For more on ERIP's, see my article on this subject here. It's a strategy that can be useful for organizations far smaller than GM.