GM in talks over more buyouts

Automaker says it's close to reaching an agreement with the United Auto Workers union on another round of buyout offers.

DETROIT (AP) -- General Motors Corp. is close to an agreement with the United Auto Workers on another round of buyout and early retirement offers to cut the number of workers in jobs banks and clear openings for workers hired at lower-tier wages, a top company official said Sunday.
Troy Clarke, GM's North American president, told reporters at the North American International Auto Show that an announcement could come within a week.
"We are negotiating in some cases plant-by-plant, but certainly group-by-group or issue-by-issue, how to roll out a special attrition program," Clark said. "We think that we'll have that done very soon."
Clarke said he couldn't reveal specifics of the plan because negotiations continue.
The company already has announced plans to offer buyouts and early retirement packages to 5,200 UAW hourly workers at service and parts and operations facilities across the country.
The offers also will be available to hourly employees at GM's Pittsburgh metal stamping plant and Massena, N.Y., casting plant, and to all hourly employees currently assigned to jobs banks in Oklahoma City, Linden, N.J., and Rancho Cucamonga, Calif. In jobs banks, workers get most of their pay even though they have been laid off.
Once they get through the jobs bank employees, buyouts will be offered in locations where GM (GM, Fortune 500) wants to pay the lower-tier wages.
GM wants up to 16,000 hourly UAW workers to leave the company. Many would be replaced by workers at the lower-tier wage scale approved under a landmark four-year contract reached with the union last year.
Such new hires would be mainly in non-manufacturing jobs and would receive reduced health care and pension benefits.
GM also anticipates replacing many higher-paid workers with entry-level employees who will make less.
Current UAW employees earn about $28 an hour, while entry-level wages begin at about $14-$15 an hour.
Chairman and Chief Executive Rick Wagoner said the company probably won't see much savings from the lower-tier wages in 2008 but would begin to realize them in 2009.
"I would be surprised as we head out of this year if there's a significant economic impact in second-tier, but we could see numbers that move into the thousands rather than hundreds as the year goes on or approaches the end of it anyway," he said.
More than 34,000 GM workers left in 2006 by way of retirement or buyouts.
If the economy worsens this year and GM has to further cut production to handle lower demand, Clarke said it currently is not looking at closing any factories.
"When we talk about adjusting our capacity, we're not talking about shutting down plants," he said. "We're talking about (assembly) line rate changes, I think. We're talking about down weeks. At least that's what our thought is today. We'll have to see how it goes."
He also said he's optimistic about an industry rebound in the second half of 2008.
December U.S. sales excluding those to fleets jumped to an annual rate of 13.7 million, one of the best retail sales rates of the year, and the nation should be through most of its adjustable-rate mortgage increases during the first half of the year, Clarke said.
"We get through that factor and this kind of general malaise, we think that the market has an opportunity to strengthen," he said. "We're optimistic that the market does have some resiliency. There does appear to be some pent-up demand."

Detroit's bumpy road to better times

U.S. automakers struggle with weak sales, ongoing losses as Detroit auto show kicks off, but lower labor costs, overseas growth could help in future.

DETROIT (CNNMoney.com) -- The Detroit News welcomed Detroit auto show attendees to town over the weekend with the headline "Carmakers try to overcome gloom."
Oil at $100. The worst sales since 1998. Billions in continuing losses. New fuel economy regulations on the horizon.
There's plenty weighing on the industry, especially the U.S. automakers, as they gather for what is officially called the North American International Auto Show. Forecasts are that U.S. sales are going to be down again this year from last year's weak level, as both high gas prices and a weak housing market weigh on car buyers.
But while there's plenty of trouble facing the industry, there are also signs of hope for U.S. automakers, in the form of new labor deals, new management and new opportunities overseas.
"As bad as it is, it could be worse," said Tom Libby, senior director of industry analysis for J.D. Power and Associates. "If you think about it, all three have taken big steps. None of them will have the strength they used to have in the near term. But they have some good new product in the pipeline and the drop in costs is going quicker than they anticipated."
Still, Libby and other experts agree it's going to be another tough year ahead for the industry in general but for the Detroit based automakers, in particular, as Ford Motor (F, Fortune 500), General Motors (GM, Fortune 500) and Chrysler LLC try to stem ongoing losses from their auto operations.

Stocks set for slight gains

Futures narrowly higher as investors mull when Fed will cut rates; bank earnings loom.

NEW YORK (CNNMoney.com) -- U.S. stocks futures gained early Monday, lifted by hopes that the Federal Reserve would step in with an emergency rate cut, although looming bank earnings remained a worry.
At 4:53 a.m. ET, S&P 500 and Nasdaq futures were narrowly higher, hinting at a flat to slightly positive start for Wall Street.
Stocks tanked last week on increasing concerns about the economy, but the darkening outlook has also raised hopes that the Fed would slash rates before its next meeting.
A report in the Wall Street Journal said the Fed is unlikely to cut rates before its next meeting on Jan. 29-30 because Fed Chairman Ben Bernanke has already "recalibrated market expectations." But that could change if the outlook dramatically worsens, the report added.
Investors have been haunted by recession worries recently, and earnings results due this week from a number of big banks could spark more fears. Embattled banks Citigroup (C, Fortune 500) and Merrill Lynch (MER, Fortune 500) are both expected to take giant writedowns when they post their results.
In global trade, Asian markets tumbled. Japanese markets were closed for a holiday. European stocks edged higher in morning trading.