Gerald Marsh remembers when working at General Motors meant you had it made.
‘Not anymore,? said Marsh, an 83-year-old GM retiree and Ortonville resident who retired in 1978.
Marsh, along with thousands of other former and current GM employees, is concerned after GM Chairman and CEO Rick Wagoner, made an announcement on Tuesday regarding changes made within the company, including a 20 percent cut in salaried employees.
GM has 32,000 white-collar jobs in the U.S., as compared to the 45,000 in 2000, according to The New York Times. The headcount cut will be achieved through normal attrition, early retirements, mutual separation programs and other separation tools, according to a statement issued by General Motors, ‘GM to bolster liquidity by $15 billion through 2009.?
GM retirees have to worry about health care coverage too, after Wagoner’s announcement.
Health care coverage for U.S. salaried retirees older than 65-years-old will be eliminated in 2009. Retirees and surviving spouses will receive a pension increase from GM’s U.S. salaried plan to help offset costs of Medicare and supplemental coverage, according to the press release.
‘I never thought it would come to this,? said Marsh.
Marsh began working at GM in 1948 when he left the Army. He worked his way from the assembly line to working as the plant’s fireman, before he retired in 1978.
‘Those were the good times,? he said.
Despite hard times for employees, GM’s savings attempts will result in an estimated reduction in cash costs of more than $1.5 billion in 2009, according to the press release. The company is not only cutting employees, it is cutting automobile models.
GM stock is plummetting, as well. Stock shares are currently at about $9, which is the lowest value in about 50 years. Shares were valued at $40 last October, according to The New York Times.
Ron Sutton said he knows he will lose his medical coverage.
The 79-year-old retiree and Ortonville resident said the increase in pension will help him buy health care independently, but he does not know how much.
‘What they consider enough compensation, I still don’t know,? Sutton said.
Sutton, a shareholder, is going to hold onto his shares for the time being. He is optimistic that the value will rise again.
David King is wary of what affect the healthcare changes will have on his plan.
‘I’m curious to know how it might impact myself,? said King, 52, an Ortonville resident and local business owner who retired in 2006.
‘Gas prices caused the market for trucks to deteriorate,? King said. ‘Now GM has to react to the market.?
King began working for GM in 1974. He said he witnessed the first era of downsizing and restructuring. The truck capacity is expected to be reduced by 300,000 units by the end of 2009. Eighteen of its next 19 launches are going to be cars and crossovers.
‘GM has been in a mode similar to this for a while, but no one thought it was going to go this far,? King said.
Due to layoffs and forced retirements, an incoming workforce of younger employees working for lower salaries is on its way through GM’s door.
Austin Mortimer, a 20-year-old Goodrich High School graduate, is currently involved in GM’s internship program.
‘The internship program is still pretty strong,? Mortimer said.
Mortimer said the program is vital to ensuring the next generation of GM employees.
‘They have to keep it,? he said.