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February 3rd, 2009

You Snooze, You Lose



If you’re an employee of General Motors or Chrysler, you should have bailed (to coin a phrase) long ago when the severance packages were even fatter then they are now. In an effort to cut costs in accordance to the government’s $17.4 billion loan, nearly every one of GM and Chrysler’s hourly workers are eligible for their latest — and less generous — “cash and cars” early-retirement package.

Members of the United Automobile Workers union at Chrysler have been offered $50,000 in severance pay, and a $25,000 voucher to purchase a new vehicle. UAW members at GM are eligible to receive $20,000 in cash and a $25,000 voucher.

For the workers waiting around to receive the best deal: you snooze, you lose:

Previously, G.M. and Chrysler offered their unionized workers as much as $140,000, all in cash, to persuade them to leave. More than 5,000 salaried workers at Chrysler accepted buyouts worth up to $100,000, including a new-vehicle voucher, in November.

The opportunities for GM and Chrysler’s employees are growing thinner by the day. Just last week the UAW did away with their “jobs bank” for GM employees. The benefit allowed employees to be paid 100% of their salary even when there was no work to be done.

What about the employees who balk or don’t qualify for early retirement? They may be presented with nothing more than pink slips come a few months. According to the New York Times, GM is planning to cut nearly 31,000 hourly and salary positions.

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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