Big Three

How do you sell a buyout?

October 25, 2011: 10:48 AM ET

It's a challenge to convince an employee to take a buyout even in a decent economic climate. Within Detroit's auto industry, much of the responsibility has fallen on the UAW.

By Shelley DuBois, writer-reporterUnited Auto Workers

FORTUNE -- It's hard to gracefully convince an employee to leave your company, even in the best economic circumstances. And during a downturn, the conversation becomes even trickier.

This is just one piece of the negotiations that the United Auto Workers has been trying to navigate. Over the past few weeks, the UAW has been negotiating with Ford (F), Chrysler, and GM (GM) to boost American jobs but keep the companies cost-competitive with automakers overseas. So far, UAW members at Ford and GM have voted to accept agreements with those companies, but have yet to ratify one with Chrysler. In general, all of these companies plan to hire more hourly employees and cut down on more expensive personnel, usually long-time workers.

This sort of agreement often means that these companies will begin to offer those expensive employees a buyout package. And that is a tough tightrope to walk for any manager: how do you simultaneously encourage certain people to leave, keep key staffers, and maintain goodwill?

In the case of the Big Three, much of the responsibility falls on the UAW. "Still, they're going to need to look their membership in the eye and say, 'we did negotiate a good deal for you,'" says Arthur Noonan, a human resource consultant at Mercer.

The challenge on the corporate side is that while these companies are trying to cut costs, some of the offerings that make a buyout package fair and attractive are expensive. More

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