GM Buyout

The major business topic this week was the GM & Delphi early retirement buyout. GM will offer anywhere between $35K to $140K for employees to accept early retirement. Up to 30,000 workers are said to be affected by this action. Employees will receive pension and healthcare, but not at the same generous levels as they once were.
In my opinion, this move is necessary. The US auto industry is currently struggling to keep up with the challeneges of globalism. GM and Ford operated on a labor system that was invented before the dawn of globalism. Working at GM was once a road to the middle class. Through firm union control and leadership, GM passed profits down to its workers. However, with the advent of Toyota, Hyundai and other foreign car companies, GM is facing two problems. A 1960s style labor model and products that are simply out of touch with demand. Shutting down plants and cutting costs due to lower demand is necessary therefore. However, the long term success of GM will lie in the design of their cars and whether they anticipate customer preferences.