June 26 (Bloomberg) -- General Motors Corp. will cut $1 billion more than planned and shed jobs faster than expected after it persuaded about 35,000 U.S. union workers to retire or leave under a program aimed at helping it return to profit.

The 35,000 buyouts and retirements consist of 33,800 United Auto Workers members and about 1,200 workers at a separate union, GM said today in a statement. Former GM unit Delphi Corp. said 12,600 workers took similar retirement offers. It didn't say how many accepted buyouts.

The departures mean GM will meet it goal of cutting 30,000 jobs by Jan. 1, two years ahead of schedule, and add an additional $1 billion in savings, to $8 billion, by year's end. Chief Executive Officer Rick Wagoner is trying to restore Detroit-based GM to profit after a 2005 loss of $10.6 billion.

``We're coming very rapidly on the road back,'' Wagoner said at a news conference in Detroit. GM expects the attrition program to cost $3.8 billion.

Shares of GM rose 30 cents, or 1.1 percent, to $28.05 in extended trading. Earlier, the stock gained 78 cents to $27.75 at 4:20 p.m. in New York Stock Exchange composite trading before the buyout details were announced.

GM, the world's largest automaker, is scaling back in North America after Asian rivals such as Toyota Motor Corp. captured a record share of the U.S. market and sent GM's share to an 80- year low. Wagoner's plans to close 12 North American facilities will trim production by about 1 million units, after another reduction of 1 million units from 2002 to 2005.

Preparing for Closings

Of the workers who agreed to leave, 4,600 workers took buyouts and 30,400 took some form of retirement, accepting packages ranging from $35,000 to $140,000. GM is trying to speed workers' departures as it shuts more plants. Factories in Oklahoma City and Lansing, Michigan, have already closed.

``Broadly speaking, the more people that take this, the better,'' Standard & Poor's analyst Robert Schulz said before the announcement. ``This is the main part of the cost reductions they're undertaking.''

Workers who accepted the offer by last week's deadline have until June 30 to change their minds, so the final numbers may change slightly. Among employees who have already passed the deadline for changing their decision, only about 1 percent did so, Wagoner said. Most of those who accepted will be gone by year's end.

`Better for the Business'

Chief Financial Officer Fritz Henderson said attrition, now running at about 6,500 workers a year, wouldn't have been enough to get the savings GM needed.

``Getting our structural costs down means our break-even point is lower, and that's better for the business,'' Henderson told reporters after the news conference.

If so many employees leave that GM can't run all of its plants, it can hire temporary workers under a March 22 agreement with the UAW. The temporary employees, who will be union members, are paid $18 to $19 an hour, GM spokesman Tom Wickham said. GM's union assembly wages are about $27 an hour.

Wagoner didn't have an estimate for how many temporary workers might be needed.

Earnings Impact

GM will gain about $1.25 a share in annual earnings for every 10,000 workers who took the offers, Merrill Lynch & Co. analyst John Murphy wrote June 16. The New York-based analyst, who rates the automaker a ``buy,'' estimated 30,000 would leave. GM's per-share loss was $9.55 last year.

Traditional union workers cost GM about $81 an hour in 2005, including benefits and retirement costs, or about $168,000 each without overtime, said Burnham Securities Inc. analyst David Healy, who is based in Sierra Vista, Arizona, and doesn't rate the shares. Each temporary worker costs about $39,520, he said.

GM's shares have risen 43 percent this year on optimism that the company can stem losses and succeed with the job- reduction efforts. The stock fell 52 percent in 2005.

In addition to one of the Saturn plants in Spring Hill, Tennessee, GM will close assembly plants in Doraville, Georgia, and Oshawa, Ontario. The automaker will shut engine plants in St. Catharines, Ontario, and Flint, Michigan. It's also shutting parts operations in Portland, Oregon; Pittsburgh and Lansing.

GM said in November it will reduce shifts at assembly plants in Moraine, Ohio, and a second car plant in Oshawa. Since then, it also cut a shift at the Lordstown, Ohio, small-car factory and said it will eliminate one of the two shifts this year at the Doraville minivan plant.

Results at GM Plants

The closed Oklahoma City plant had the largest number of buyouts and retirements, with 1,533 workers leaving from among about 2,600, GM spokesman Dan Flores said. The Doraville plant was close behind with 1,531 out of 2,600. At Spring Hill, 1,356 of about 4,800 employees took the offers, Flores said.

``Nowhere in my wildest dreams did I think we would get an excess of 800 accepting,'' said Tito Boneta, acting president of UAW Local 1005, whose 2,100 members run GM's metal shop in Parma, Ohio. ``I guess all the procrastinators came out in the final hours. This was such a big decision for a lot of people, they just held off as long as they could.''

About 1,240 workers represented by the International Union of Electrical Workers-Communications Workers of America in Moraine, Ohio, previously accepted buyouts or early retirements under a similar plan that ended two weeks ago, Flores said. About 4,000 Moraine workers build GM's TrailBlazer sport-utility vehicle and other mid-size SUVs.

Early Retirement

GM offered buyouts of $35,000 to employees still working after reaching the 30 years' service needed to retire. Those within three years of retirement eligibility would get a pension of slightly less than the standard $36,000. They'd get a full pension on the 30th anniversary of their service date.

Employees who have at least 10 years at GM and aren't eligible for early retirement were offered $140,000 buyouts. Workers with fewer than 10 years of service can get $70,000. Those who accept the offers give up health coverage and stop accumulating benefits against GM's $170 billion pension and retiree health-care obligation.

Under current GM contracts, GM must keep paying workers even if the automaker doesn't have work for them to perform.

Delphi, GM's largest parts supplier, plans to say in July how many of its 33,000 U.S. union workers accepted similar buyout offers. The Troy, Michigan-based company filed for bankruptcy protection for its U.S. operations in October.

As many as 5,000 workers at Delphi also will be allowed to return to GM.

GM, Delphi and the UAW are trying to avert a strike at Delphi, whose unions have threatened to walk out if CEO Steve Miller gets bankruptcy court approval to scrap their contracts. He wants to cut hourly pay to as low as $12.50 from about $27.

``The probability of a strike is now much lower than it was a month ago,'' said Jim Hossack, an analyst with AutoPacific Inc. in Tustin, California, who doesn't own any GM shares. ``On balance it looks like this was all really good news.''

To contact the reporters on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net; Greg Bensinger in New York at gbensinger1@bloomberg.net

Last Updated: June 26, 2006 19:20 EDT