DETROIT – About 40,000 hourly workers have accepted buyout and early retirement offers from General Motors Corp. (GM) and Delphi Corp., exceeding expectations and potentially resulting in significant cost savings for the automaker.
About 30,000 GM workers, or almost one-quarter of the U.S. factory work force at the automaker, had taken the offer as of Friday morning, while about 10,000 workers at Delphi, a former GM parts unit that has filed for bankruptcy, had taken the offer, a United Auto Workers union local official said Friday.
"It has exceeded all our expectations," the UAW local official said.
The offers end later on Friday.
The number of blue-collar workers who accept the early retirement incentives has been closely watched as an indicator of the success of GM's turnaround efforts.
"We believe the company is successfully accelerating its restructuring efforts through its buyout program. which will result in significant cost savings in the near term," said Merrill Lynch analyst John Murphy, reiterating his "buy" rating on the GM stock on Friday.
TALLY ON MONDAY
But Deutsche Bank analyst Rod Lache said he was concerned cash cost savings will not be sufficient to offset the pace of market-share and product-mix erosion that GM is currently experiencing.
"We estimate every point of market share loss equates to roughly $1.3 billion pretax," Lache, who has a "sell" rating on GM stock, said in a note to clients.
GM has offered a sweeping package of buyouts, ranging from $70,000 to $140,000, to more than 125,000 unionized factory workers in a bid to reduce costly benefits for an aging work force.
GM spokeswoman Katie McBride said the company would not have an interim tally until Monday since afternoon shift workers still had until midnight Friday to sign up.
Also, workers who accepted the offer on Friday still have seven days to revoke their acceptance.
"The final, final day is really June 30," she said.
Delphi spokesman Lindsey Williams said the parts maker would not provide information on the acceptance rate before late Monday at the earliest.
A spokesman for UAW International was not available for comment.
GM lost $10.6 billion in 2005 amid rising costs and falling U.S. market share. The automaker's U.S. market share fell 3 percentage points to 22.5 percent in May. The company is in the midst of a sweeping restructuring, which includes shuttering 12 plants and cutting 30,000 jobs.
At Delphi, the buyout plan initially covered only up to 13,000 UAW workers.
In June, Delphi, the UAW and GM announced a supplementary agreement extending the pre-retirement plan to workers with at least 26 years experience and offered straight buyouts to the entire Delphi UAW workforce under the GM UAW buyout terms.