Auto Bailout Part 2 – Taxpayer Cost Increases To $710,000 Per GM Employee

The following Associated Press article appeared on YahooNews.com.

GM says 7,500 hourly workers decide to leave

DETROIT – About 7,500 General Motors Corp. workers have signed up to take buyout and early retirement incentives to leave the company, the automaker said Thursday.

Also, Chrysler LLC said Thursday it would extend its offers to entice blue-collar workers to leave the company. The old deadline was Friday.

At GM, about 12 percent of the company’s U.S. hourly work force of 62,400 decided to leave, most through early retirement offers.

GM offered $20,000 cash and a $25,000 voucher to buy a car to all of its hourly U.S. employees in an effort to further trim its blue-collar work force to match reduced sales. company. [$20k cash and a $25k car – $45K total cost – paid for with Taxpayer Dollars from Auto Bailout #1. How many of the nearly 10 Million Americans currently looking for new jobs received  a $45K payout? These same Americans will be asked to pay for this largesse with higher taxes when they find work? In Detroit, Union officials are quick to take credit for these “buyout” payments. As if the payments come from UAW cash and not from the American Taxpayers, who, to date, have  not consented to these payments ] 

The deadline to decide was Tuesday, and many of the workers waited until the last minute to turn in their paperwork. The workers have seven days from the date they turn in the paperwork to rescind their decision, so many will have to decide by March 31.

For those that will leave, the effective date of their departure is April 1.

Both GM and Chrysler are living on a total of $17.4 billion in government loans and are seeking another $21.6 billion. [Living on and making these incredible “buyout offers” at Taxpayer expense] The Obama administration’s auto task force has indicated it may offer more aid, but further concessions are possible from both the companies stakeholders. [Auto Task Force or Auto Bailout Team? Neither GM nor Chrysler has presented a plan establishing that they will be “viable” by any date certain – a requirement previously imposed on these Automakers before any additional cash was to be handed out]  

Both companies have to submit finalized restructuring plans to the federal government by March 31. [The plans that were due this past December! Anyone want to bet on additional cash and an additional extension of time from the Obama Administration].  

The latest round of buyouts and early retirements at GM was the third for the company since 2006. From all three offers, more than 60,000 workers have decided to leave the company.

http://news.yahoo.com/s/ap/20090326/ap_on_bi_ge/gm_buyouts

After the 7,500 take their “buyout” and leave, GM will have 54,900 remaining hourly workers. (62,400 – 7,500)

The cost of “Bailout” part 1 ($17.4 Billion) and “Bailout” part 2 ($21.6 Billion) is $39 Billion Dollars.

If  you divide the cost of the “Bailouts” by the number of hourly GM employes   ($39,000,000,000 / 54,900 =) you get the figure of $710,000 per employee. (Seven Hundred And Ten Thousand Dollars Per Employee).

The UAW reports that the average hourly salary for Auto Workers is $55 an hour. ($40/ hour in wages, overtime and vacation pay plus $15 per hour in “benefit” costs: total: $55.00) This number does not include the additional $15 to $18 per hour “legacy costs” paid by the “Detroit 3” . http://www.nytimes.com/2008/12/10/business/economy/10leonhardt.html?_r=2&pagewanted=1&hp

Using just the UAW calculation for hourly salary ($55 /hr) and a standard 40 hour work week over 52 weeks you can calculate an average yearly salary of  $114,400. (This is an under-estimate as the actual number of overtime hours have not been added into the equation). 

What does this mean? “Bailouts”  part 1 & 2 will not only cost Taxpayers $710,000 per GM employee, but if you want another way to look at the numbers – it will cost Taxpayers the equivalent of 6.2 years of salary for evey GM employee in North America.

Don’t forget, they will be back for more money – no one is even pretending that this is enough cash to actually fix the problems, if , in fact, the problems can be fixed.

Tell Washington To Say No To More Bailouts: http://www.usa.gov/Contact.shtml

Do you find it surprising that a working couple employed by the “Detroit 3” can earn in excess of $250,000 a year?

Does that change your perspective of  who you consider to be “rich”?