GM is offering a big payout to end union contracts with its workers, reports the Los Angeles Times. All 125,000 workers at the automaker and its former parts maker Delphi, will be offerred packages worth as much as $140,000 to leave the company.

It could all add up to $5 billion but the company sees shrinking the workforce and getting out from under its union contracts as a better system than the notorious “jobs bank” system which sees laid off workers paid their salary to sit around ostensibly improving their chances of getting other work. The UAW finally signed off on this deal and is effectively admitting that the days of a lifetime guaranteed to stay on the GM line are gone.

Presumably now that Kirk Kerkorian is on board with GM, he and Jerome York have been pushing this plan along. It’s a calculated risk to take a big hit now rather than keep bleeding cash until it fades away.

Some analysts remain skeptical. There’s no guarantee that the company won’t just hyrry up some retirements which won’t cut it’s benefit obligations very much. And worse - there’s no real plan to make GM over like Toyota even though that’s what the company wants to do.

And for those who are thinking of taking the package, the news is good - sort of. The number of new jobless applications was even less than experts expected, reports the Associated Press. The Labor Department said 302,000 laid off workers applied for jobless benefits. It was the first decline in four weeks and means claims are at a level where the labor market will strongly in the next few months.

The economy created a 243,000 jobs with construction, retail, financial services, health care and education all showing healthy gains last month. Manufacturing was still dragging, largely because of the troubles of GM and Ford. But that’s not us. We’ve got historic lows for unemployment rates and may be looking at some problems finding workers.