Should General Motors (GM) workers be annoyed at the latest buyout offer from the struggling automaker? The latest offer is $20,000 and a voucher for a free car worth $25,000. Some folks aren't happy. There are good reasons why:
- It's worse than last year, when GM offered a $70,000 cash package.
- It's lower than Chrysler's offer (currently $50,000 in cash and a $25,000 voucher.)
- Cars aren't the same as money. By giving workers a quickly depreciating asset at a time when auto sales are closing in on a 27-year low, GM and Chrysler look a little brazen. They get lower inventories, but workers get stuck with a car they'll have trouble unloading if times get even tighter.
The automakers have until Feb. 17 before they go back to Congress to justify their $13.4 billion in federal loans. It's clear both automakers and the United Auto Workers are being forced to make steep concessions on labor, so it's possible many employees are resigned to a less-than-ideal fate. But offering up an asset that won't go nearly as far as an equivalent amount of cash for already anxious workers will likely prove tough to swallow. In the meantime, GM shares were off nearly 5 percent yesterday.
