GM tries to replace ALL US workers with cheaper labor

GM tries to replace ALL Union workers

GM offers buyouts to 74,000
Auto giant aims to replace much of U.S. workforce with lower-paid new hires, dangling $140,000 buyouts to UAW members to stem North American losses

In an effort to shave ongoing losses, General Motors offered lucrative buyouts Tuesday to 74,000 employees - its entire U.S. hourly workforce.
The nation's largest automaker announced the latest round of buyouts as it reported another loss on its core auto operations in the fourth quarter, which combined with charges taken earlier in the year left GM (GM, Fortune 500) with a company-record $38.7 billion net loss for 2007.
To try to stem automotive losses that have dogged the company since 2005, the company is making a range of offers, up to cash payments of $140,000 to the remaining 74,000 GM workers represented by the United Auto Workers union.
The goal is not to reduce headcount but rather to bring in new workers at a lower cost

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Been there - Done That

We've been through deflation before. Deflation turned the 1929 panic into the great depression.

This period was also accompanied by a flood of immigrants (read: cheap labor) which made wage deflation possible.

immigration, depression

Actually at that time immigration into the US was quite restricted and was not a factor in the high unemployment rates of the early 1930's. There was the immigration act in 1924 which (in a discriminatory way) greatly limited immigration. Wage or labor arbitrage wasn't the issue.

The causes of the Great Depression are still debated by one of the major ones was consumer debt, which we see today, consumers were overextended.

There was also a run on the banks and a too small money supply. Many blame the Federal Reserve for enabling easy, overextended credit and then did nothing to increase the money supply when the crash happened.

Another cause cited was the increasing divide between the very rich and the poor

Then, they passed the Smoot-Hooley Act, which had incredible tariffs, average 50% which caused retaliatory tariffs from other nations, but exports, international trade was a very small percentage of the US economy at that time.

If you want to go to labor arbitrage through immigration, look to 1820-1920, many examples in the US.

But do you notice how the causes of the Great Depression and what is happening now sound all too familiar?

This was in the local paper.

General Motors Corp. today announced it will offer retirement incentives up to $62,500 to clear out its most senior workers and make way for lesser-paid new hires under a deal struck with the United Auto Workers. http://www.detnews.com/apps/pbcs.dll/article?AID=/20080212/AUTO01/802120...

Welcome DK!

Hi DKMich,

You might consider registering for I know you're very active on these issues and if you just post anonymously, most of the site features are turned off and you go into a moderation queue versus being able to really use the site "as your own".

Wages are Being Reduced

Wages are being cut across all Industries. Milk at $4 a gal. and Gasoline over $3 per gal. and wages are decreasing(?) I have IT experience but find I can do data entry work (a low stress job) for just a few bucks less per week rather than a high stress job managing a communications network (that often requires wearing a pager and staying late in the evening). It's not that clerical jobs pay so well, it's that skilled labor and higher stress positions are paying so low. College Degrees are buying candidates top pick for job positions in call centers and entry level office jobs earning $10 per hour. New graduates will find it difficult to leave their parent's home. The over 40, that lost their jobs and had to 'reinvent' themselves find that even if they worked 2 full time jobs they will never earn what they did in the 'good old days'.