General Motors and United Auto Workers Union Case Study

General Motors and United Auto Workers coalescence - Case Study ExampleHowever, there is more to be done if GM is to avoid bankruptcy, or emerge from a reorganization process as a financially sound company. This paper leave alone examine the options that the UAW, GM, and their management have, and make recommendations in regards to managing the periodical dedicate issues at GM.The UAWs hourly pay is lost down into three main categories and several sub-categories. As of December 2008, the total compensation was comprised of the hourly pay of $30 per hour, premium payments of $10 per hour, and genuine and future benefits of $33 (Sherk). Premium payments include overtime pay, faulting premiums, and vacation and holiday pay. Benefits include health and life insurance, disability, unemployment benefits, and pension payments. The health and loneliness benefits paid to retirees is considered a current compensation expense, and according to Sherk, Since there are more retired than ac tive employees this makes it appear that GM employees introduce far more than they actually do. Reducing the hourly compensation to the $50 goal testament require that GM and the UAW look at all these areas in an effort to find cost deliver opportunities.A central key to saving labor costs is reducing the size of the workforce. Currently GM has established a buyout program that compensates the employee with up $45,000 cash immediately (Bunkley 2). In return, the employee severs all ties with GM, and the cost of current and future benefits is reduced to zero. While the recent round of buyouts resulted in 7500 workers leaving GM, 14000 remain at GM who are eligible for the program. However, GM preconditioninated the program in early April 2009 and has do no plans to regenerate or continue it. The money saved through the buyout program is critical because it saves in the short term as well as the long-term future benefits such as health insurance and retirement pensions. Two thir ds of the eligible workers declined the arrangement, but GM could increase the incentive in an effort to increase that number. march on voluntary reductions in the workforce allow for allow GM to restructure its product lines in an surroundings of higher productivity with fewer employees. The fact that the workforce reductions are voluntary maintains good employee relations as well as Union/Management cooperation. A GM that is reduced in size will allow them to focus on the product lines that have the most potential for sales growth. GM has made some pro-active moves in this direction by announcing the closing of 13 plants, phasing out the Pontiac brand, and cutting 21,000 hourly jobs (GM to stage Out Pontiac Brand). Ford, who has reduced hourly compensation to about $55 per hour has pursued a standardised strategy and said that the figure would continue to decline as more workers took buyouts and as the new-vehicle market recovered, allowing change magnitude production (Bunkle y 2). An extension of the buyout program by GM, an added incentive for taking advantage of it, and the increased productivity would charge GM on par with Ford at $55 per hour.Further reduction in the hourly pay could be accomplished by more closely limiting the