That I never get my business in a situation where I have to spend $45,000 just to lay off a worker.
General Motors is offering buyouts to virtually all of its remaining hourly workers, becoming the latest automaker to try to cut labor costs by giving nervous workers an incentive to leave the company.
The move follows a similar move by Chrysler LLC, which made an offer to its hourly workers on Monday.
The GM (GM, Fortune 500) offer, which takes effect Friday, is less lucrative than the deal proposed by Chrysler, or even offers that GM has made to its hourly staff in the past. The automaker will give most of its 62,000 U.S. hourly workers $20,000, as well as a voucher good towards the purchase of a GM car worth $25,000.
In the past, GM offered between $45,000 to $62,500 to workers to retire early, and $140,000 to employees who left the company and agreed to give up post-retirement health care coverage. Those offers were all cash.
Seriously, is this driven by GM contracts, or is this just GM's choice as an alternative to firing everyone? There are cases when it makes sense for a company to go through the added expense of worker buyouts vs. layoffs. The buyouts avoid the bad press of a layoff, they help maintain the company's reputation in the remaining workforce and community, and may not be a bad investment for a company temporarily on hard times that knows good times, and the need to hire more quality employees, are just around the corner.
But seriously, do automakers really have anything to lose at this point to lose? And if the main reason for buyouts over layoffs is reputational, is this really what we want our tax money funding, the maintenance of the good name of GM management?