Jim Cramer Blog

About 47,600 hourly workers decided to leave General Motors (GM) and Delphi Automotive after the companies offered an incentive package for those who would cooperate. This is a further push to cut costs at GM. As we have said, the only way for this company to get back on track is to reorganize the entire operation currently in place and start over. This surprise cooperation will bring GM about two years ahead of schedule in terms of cost cutting. This is a significant development. GM offered buy outs of $140,000 for workers with at least 10 years of service, while those with less than 10 years would receive $70,000. The workers would cut nearly all ties with the company except for vested pension benefits. It seems like a good deal on both sides of this equation. We are reiterating our buy on this stock, but watch for increased volatility. It may be wise to protect this investment with a protective put.