19,000 Workers Accept Buyout at G.M.

Wow:

DETROIT — General Motors on Thursday said that 19,000 hourly workers — a quarter of a unionized work force that already has been dramatically pared down — have accepted buyouts.

Most of the workers will depart within the next month, as G.M. formulates a plan to deal with plummeting demand for sport utility vehicles and pickup trucks while gasoline prices climb above $4 a gallon. The proportion of G.M. workers who took a buyout is more than triple the acceptance rate at Ford, where 4,200 of 54,000 workers took deals offered as part of a similar program.

Though G.M.’s 74,000 workers are on average older than Ford’s, the size of the exodus at G.M. signals deteriorating confidence among members of the United Automobile Workers union in their employer and the industry.

Many who remain — particularly workers at truck plants who were laid off for much of the spring because of a strike at a parts supplier — face what is sure to be a summer filled with plant idling and an uncertain future after that. G.M. said in April that it would eliminate one shift at each of four truck plants in Michigan, Wisconsin and Ontario.

But gasoline prices have risen 35 cents since then, making big vehicles even more unattractive and suggesting that Detroit automakers will need to cut deeper.

“While too early to tell definitively, indications are that the shift in buying preferences may, as in the late ’70s/early ’80s, persist for several years, even if oil/gas prices retrench,” Brian Johnson, an analyst with Lehman Brothers, wrote in a note to clients.

Ford last week responded to falling sales by saying it was reducing production in North American by 15 percent, ramping up cost-cutting efforts and abandoning its long-held goal of returning to profitability by next year.

Ford is also planning a considerable reduction in salaried positions, according to a person with direct knowledge of the plan. The cuts would be achieved through layoffs, rather than buyouts or early retirement offers, and reportedly could number as many as 2,000, though this person, who is not authorized to speak publicly about the plan, would not confirm that figure.

“They’re finally recognizing that there’s a sea change in the vehicles people are going to buy,” said Greg Gardner, an analyst with the Oliver Wyman Group, which publishes the Harbour Report on automotive manufacturing.

Ford posted a surprising $100 million profit in the first quarter but warned that it would lose money in the rest of the year.

Meanwhile, G.M. lost $3.3 billion in the first quarter. It said second-quarter income would be reduced by $1.8 billion because of strikes at two of its plants and by the 87-day strike at its supplier, American Axle & Manufacturing, all of which recently ended.

But much of that amount would have been lost even without the American Axle walkout, because G.M. still has more than four months’ worth of inventory of the vehicles produced in the factories that had to be shut down.

“Demand has deteriorated so fast that inventory units haven’t declined much and inventory days remain at record high levels,” Mr. Johnson wrote. “We believe that very sharp production cuts will be required throughout the rest of the year.”

G.M. is expected to discuss its plans to cope with declining sales at its annual shareholder meeting Tuesday in Wilmington, Del. The plans are believed to call for further reductions in truck production but not additional plant closings.

The company said it would hire new workers, under a significantly lower pay scale created by the contract G.M. signed with the U.A.W. last fall, to replace many of those who leave through the buyout program. G.M. could decide to slow production by hiring fewer replacements or by hiring them more slowly than originally intended.

“Despite significant challenges in the U.S. market, we continue to reshape our business for long-term success,” Troy Clarke, the president of G.M.’s North American operations, said in a statement. “This attrition program gives us an opportunity to restructure our U.S. work force through the entry-level wage and benefit structure for new hourly employees.”

The number of workers leaving G.M. through the buyouts is at the high end of the range that the U.A.W. president Ronald Gettelfinger estimated in February. But after Ford only managed to persuade half as many workers to leave as it wanted, many thought G.M.’s acceptance rate would be much lower.