GM's recent move to early retire their skilled labor is a great example of labor arbitrage by nation-states. The reason is so they can match labor costs to Mexico for manufacturing a new car in the United States. Remember all of that talk about fixing NAFTA?
General Motors Co (GM.N) said on Monday that it was looking to reduce its payroll by several thousand skilled trade workers at 14 U.S. plants in the first quarter of 2011.
GM has offered $60,000 to skilled trades workers who retire or leave the automaker's payroll by March, said spokesman Chris Lee. The automaker currently has a "a couple thousand" more skilled trade workers than it needs to run its U.S. factories, Lee said.
The buyouts and early retirement offers were made to United Auto Workers union-represented workers in 14 U.S. plants, including the Orion, Michigan, assembly plant.
That plant will build the new Chevrolet Sonic under a cost-cutting agreement negotiated by the UAW and intended to allow GM to build the small car in the United States rather than import it from a lower-cost market like Mexico.