General Motors Co (GM.N) and the United Auto Workers union are discussing buyouts for higher-wage, skilled trade workers as contract talks between the union and all three Detroit automakers intensify, people familiar with negotiations said.
The early retirement offers would cut labor costs for GM, which emerged from a government-funded bankruptcy at near the midpoint of its current, four-year contract with the UAW.
UAW-represented skilled trade workers make about $32 per hour, more than the $28 per hour for veteran, unskilled production line workers.
The union's current contract with Detroit automakers expires on September 14 and expectations have been building for a mid-September settlement between the union and GM, Ford and Chrysler.
GM has taken the focus as the lead company among the three Detroit automakers in UAW negotiations, people with knowledge of the ongoing talks in Detroit said.
Some 27 percent of the 112,000 hourly paid production workers represented by the UAW at the Detroit Three automakers are eligible for retirement.
It was not immediately clear how many skilled trade workers at GM could be offered buyouts if the two sides agree on terms.
Skilled trade workers at U.S. automakers average between 20 percent and 23 percent of the overall, UAW-represented production workforce, said Kristin Dziczek, a labor expert at the Center for Automotive Research.
By contrast, at U.S. plants operated by Japanese automakers such as Toyota Motor Corp (7203.T), the average is 15 percent or less, she said.
Any offers would target GM plants in the United States where the automaker believes it has far more of the higher wage workers than it needs to ensure production lines run smoothly, one of the sources said.
Skilled trade jobs include electricians, plumbers and pipefitters.