General Motors has always been one of the United States’ top automotive companies, but in the late 2000s, the automotive giant was experiencing serious financial problems.  In 2007, GM lost $38.7 billion, which was the worst loss for any automotive company in history. The following year, GM would have to take drastic measures to cope with 2007’s record-breaking loss.

On this day, February 12th, in 2008, GM offered buyouts to 74,000 U.S. hourly employees protected by Auto Workers (UAW) union.  GM hoped that buyouts to their union employees would allow for employment of nonunion workers at a lower price.  At the time, veteran workers made an average of $28.12 an hour, which jumped to more than $70 when pension and health-care coverage were added in.  Gm offered a $140,000 lump payment to those who worked for 10 years or more and would be willing to forfeit their health benefits and pension.

19,000 GM workers accepted the buyouts, but it would not solve GM’s financial woes.  Rising gas prices led to a further decline in auto-sales in 2008.  In December of 2008, GM would be granted a $13.4 billion loan by the federal government. Despite government assistance, GM would file for chapter 11 bankruptcy in June of 2009.