I’m Steve Ember with the VOA Special English Economics Report.
General Motors lost almost eleven thousand million dollars last year. Now the cost-cutting efforts of the world's largest automaker are gaining speed.
Last week, talks with the United Auto Workers union resulted in a major deal. G.M. agreed to offer buyouts to one hundred thirty-one thousand factory workers. No one knows how many will accept. The deal affects hourly workers at G.M. and its biggest parts supplier, Delphi.
A buyout is an offer of money, and sometimes other terms, if an employee will agree to leave a job or retire early.
Workers at G.M. who are too young to retire are being offered as much as one hundred forty thousand dollars to accept the buyout. They would lose things like their health care plans. Older workers are being offered smaller payments but the chance to retire early under G.M.'s retirement program.
Buyouts are costly, but G.M. hopes to save money in the long term. Its share of the American car market has been shrinking for years. The offer is part of a plan announced last June to cut thirty thousand jobs through two thousand eight.
The deal with the union does not involve supervisors or others who earn a salary instead of an hourly wage. The company wants to cut up to seven percent of its non-hourly workers this year. On Tuesday G.M. cut several hundred salaried jobs.
G.M. is trying to do something that several steel makers and airline companies have tried but failed to do. It is trying to restructure without seeking bankruptcy court protection from its creditors.
The company is moving to reduce its interests in some businesses it owns or controls. G.M. says it sold seventy-eight percent of G.M.A.C. Commercial Holding on March twenty-third to three investment companies. The deal is worth almost nine thousand million dollars.
G.M. also has agreed to sell its eight percent share in the Japanese carmaker Isuzu.
And the company wants to sell a large share of its financing company that provides loans for cars, homes and businesses. G.M has been in talks to sell fifty-one percent to Cerberus Capital Management in a deal estimated at eleven thousand million dollars.
This week General Motors released its yearly report which had been delayed. The company restated several years of financial results.
This VOA Special English Economics Report was written by Mario Ritter. Read and listen to our reports at voaspecialenglish.com. I'm Steve Ember.