[larrymyers]

You're not missing the point, though maybe it won't go as badly for a older company like GM. I got to witness this failed strategy first hand at AOL around 2010.

The people who opted into the VSP were the ones who could easily find another job, and were happy to take the money. Some of them even came right back in a consulting role after a 2 month cooling off period. The people who never even considered the offer were the low performers who knew they were getting paid far more than they could hope to command on the open job market.

GM already has a list of employees they have considered laying off to cut costs. They're hopeful that the people who volunteer are mostly on this list. Now GM can refuse to accept volunteers who they consider critical to business operations. Those people should immediately demand large pay raises.

That being said, this is pretty shitty severance package, especially since it's only being offered to people with 5 years or more of service. Unless you know you can find another job quickly why would you take a 5-12 months of pay with no extra benefits? (COBRA is about the most expensive way I can imagine to pay for private health insurance for many people.)

I suspect the worst case scenario for GM is they are about to have a ton of experienced and competent employees with important institutional knowledge walk out the door, and find themselves left with a bunch of new hires that aren't really sure how to keep the business operating at corporate.

[hd95489]

If your are a year from retirement that’s about the only reason

[tnel77]

I worked at a GM sized company right out of college and they did a voluntary early retirement thing like this. It was one week’s salary for every year of service with the company plus they’d pay your health insurance premiums for the rest of the calendar year.

They had a lot of people who planned to retire in 1-3 years take that offer and I knew quite a few who came back within a couple of months for a higher salary than they previously had.