GM workers take retirement deal

GM is slashing costs as it tries to turn around its fortunes

More than 33,000 factory workers have accepted early retirement packages at struggling car giant General Motors and its bankrupt parts supplier Delphi.

The United Auto Workers Union (UAW) said 25,000 GM and 8,500 Delphi staff had signed up for the deals, ranging from $35,000 (£19,000) to $140,000.

GM wants to close 12 plants and cut 30,000 jobs, while Delphi is seeking to shut 21 of its 29 manufacturing sites.

The car maker is cutting costs after making a loss of $10.6bn in 2005.

Contracts dispute

Delphi and the UAW are still fighting over plans to change labour contracts.

The company is seeking bankruptcy court approval to scrap existing contracts and impose wage cuts, which it says are vital if the company is to survive.

Unions have threatened to strike over the plans.

Last month, Delphi boss Kevin Butler told a bankruptcy court that it would be better for the firm to endure a spate of strikes now, and called on the bankruptcy court to annul its labour contracts.

The bankruptcy court has adjourned until August in order to give the firm and workers an opportunity to sort out their differences.

Delphi is still the main supplier to GM and any strike would paralyse production.

A strike could close GM's assembly plants within 48 hours and cost the firm billions of dollars, analysts said.

Last month, about 24,000 UAW union workers at 21 Delphi plants voted for the action by a majority of 95%.