Rob Woodward
2018-11-01 01:27:35 UTC
General Motors is offering voluntary buyouts to salaried workers in
North America, acknowledging Wednesday that if it does not get enough
takers, it may consider layoffs early next year.
Shortly after reporting better-than-expected third-quarter earnings,
CEO Mary Barra sent an email to all 50,000 salaried GM employees in
North America at about 8:30 a.m.
"We sent a letter to employees saying any salaried employee in North
America with 12 years or more experience will have the opportunity to
take a voluntary severance program," said GM spokesman Pat Morrissey.
GM has been cutting costs for several years. Wednesday, it said it
would make $6.5 billion in reductions for 2018. The job cuts will not
benefit GM until 2019, Morrissey said.
GM reported good third-quarter results, proving the automaker is,
"still in a good place in terms of our performance and the future." It
will continue recruiting and hiring workers needed for next-generation
transportation, Morrissey said.
GM has 18,000 salaried employees who have 12 years or more experience.
There is no internal target as to how many GM wants to take the
offers.
Depending on how many workers take the offer and other cost-cutting
efforts, Morrissey said, "we'll re-evaluate doing an involuntary
program after the first of the year."
In the midst of this, GM will continue to recruit talent for certain
areas of the business it is expanding, namely engineering and
technology for its work on self-driving and electric cars, he said.
"We always have the need to acquire new talent. We're trying to
address ongoing efforts to reduce costs but continue our efforts in
working on the future of mobility," said Morrissey. "We'll continue to
recruit in select areas of the business."
Business consultants say it makes sense for GM to continue to hire in
select areas, but warn that can come at a cost.
That is the right thing to do for the business, but it will be a big
bone of contention from those pushed out or terminated for lack of the
needed skills, said Jon Gabrielsen of J.T. Gabrielsen Consulting.
Gabrielsen is a market economist who advises automakers and auto
suppliers.
Its difficult to predict whether such voluntary job cut programs will
have a high or a low take rate, Gabrielsen said. It depends on the
ages of the people who get offers. GM said it is not an early
retirement program. That means some people in their 30s or 40s might
accept the offer because they want to change careers or they fear
getting cut after bypassing a generous buyout, said Gabrielson.
But he said he has seen enough similar programs to estimate that about
7,000 salaried GM workers in metro Detroit will likely voluntarily
take a buyout or be laid off over the next two years. He said the same
will be true for Fiat Chrysler and Ford salaried employees in metro
Detroit, with Ford being a little higher.
The company has hired 17,000 salaried and hourly workers in the past
two years and spent $1 billion remaking its offices to be modern
workspaces. It also has won two major investments in its work on
autonomous vehicles, with Japan's SoftBank and Honda partnering with
the carmaker's Cruise division.
The company says that 40 percent of its 67,000 salaried full-time
global workers have been hired in the past five years.
Employees who are eligible for the buyout are being informed
Wednesday, Morrissey said. They have until Nov. 19 to make a decision.
Those who opt to take the buyout have until the end of the year to
continue with GM, with severance effective Jan. 1.
Crosstown rival Ford also is working to reduce its salaried workforce.
Ford has not provided specifics on how many jobs will be cut or over
what time frame in its $11-billion "fitness" plan.
Earlier Wednesday, GM announced better-than-expected third-quarter
results. For the quarter, GM reported a net profit of $3.2 billion
before taxes, up 25 percent from a year earlier. It recorded a
$5.4-billion loss in the third quarter last year after selling its
European operation.
After taxes, net income was $2.5 billion.
The job reductions are meant to keep GM lean as it faces sales
plateaus, rising commodity costs, a trade war and impacts from
currency fluctuation.
"Weve been on a journey to transform the company, both in how we
operate the business and in how we lead in the future of mobility.
Even with the positive progress weve made, we are taking proactive
steps to get ahead of the curve by accelerating our efforts to address
overall business performance," said Morrissey in a statement.
He said GM is trimming "while our company and economy are strong. The
voluntary severance program for eligible salaried employees is one
example of our efforts to improve cost efficiency."
Through the third quarter, GM has hit $6.3 billion of the total $6.5
billion in cost efficiencies it is targeting by year end, CFO Dhivya
Suryadevara said.
https://www.freep.com/story/money/cars/general-motors/2018/10/31/gm-buyouts-salaried-workers/1831530002/
North America, acknowledging Wednesday that if it does not get enough
takers, it may consider layoffs early next year.
Shortly after reporting better-than-expected third-quarter earnings,
CEO Mary Barra sent an email to all 50,000 salaried GM employees in
North America at about 8:30 a.m.
"We sent a letter to employees saying any salaried employee in North
America with 12 years or more experience will have the opportunity to
take a voluntary severance program," said GM spokesman Pat Morrissey.
GM has been cutting costs for several years. Wednesday, it said it
would make $6.5 billion in reductions for 2018. The job cuts will not
benefit GM until 2019, Morrissey said.
GM reported good third-quarter results, proving the automaker is,
"still in a good place in terms of our performance and the future." It
will continue recruiting and hiring workers needed for next-generation
transportation, Morrissey said.
GM has 18,000 salaried employees who have 12 years or more experience.
There is no internal target as to how many GM wants to take the
offers.
Depending on how many workers take the offer and other cost-cutting
efforts, Morrissey said, "we'll re-evaluate doing an involuntary
program after the first of the year."
In the midst of this, GM will continue to recruit talent for certain
areas of the business it is expanding, namely engineering and
technology for its work on self-driving and electric cars, he said.
"We always have the need to acquire new talent. We're trying to
address ongoing efforts to reduce costs but continue our efforts in
working on the future of mobility," said Morrissey. "We'll continue to
recruit in select areas of the business."
Business consultants say it makes sense for GM to continue to hire in
select areas, but warn that can come at a cost.
That is the right thing to do for the business, but it will be a big
bone of contention from those pushed out or terminated for lack of the
needed skills, said Jon Gabrielsen of J.T. Gabrielsen Consulting.
Gabrielsen is a market economist who advises automakers and auto
suppliers.
Its difficult to predict whether such voluntary job cut programs will
have a high or a low take rate, Gabrielsen said. It depends on the
ages of the people who get offers. GM said it is not an early
retirement program. That means some people in their 30s or 40s might
accept the offer because they want to change careers or they fear
getting cut after bypassing a generous buyout, said Gabrielson.
But he said he has seen enough similar programs to estimate that about
7,000 salaried GM workers in metro Detroit will likely voluntarily
take a buyout or be laid off over the next two years. He said the same
will be true for Fiat Chrysler and Ford salaried employees in metro
Detroit, with Ford being a little higher.
The company has hired 17,000 salaried and hourly workers in the past
two years and spent $1 billion remaking its offices to be modern
workspaces. It also has won two major investments in its work on
autonomous vehicles, with Japan's SoftBank and Honda partnering with
the carmaker's Cruise division.
The company says that 40 percent of its 67,000 salaried full-time
global workers have been hired in the past five years.
Employees who are eligible for the buyout are being informed
Wednesday, Morrissey said. They have until Nov. 19 to make a decision.
Those who opt to take the buyout have until the end of the year to
continue with GM, with severance effective Jan. 1.
Crosstown rival Ford also is working to reduce its salaried workforce.
Ford has not provided specifics on how many jobs will be cut or over
what time frame in its $11-billion "fitness" plan.
Earlier Wednesday, GM announced better-than-expected third-quarter
results. For the quarter, GM reported a net profit of $3.2 billion
before taxes, up 25 percent from a year earlier. It recorded a
$5.4-billion loss in the third quarter last year after selling its
European operation.
After taxes, net income was $2.5 billion.
The job reductions are meant to keep GM lean as it faces sales
plateaus, rising commodity costs, a trade war and impacts from
currency fluctuation.
"Weve been on a journey to transform the company, both in how we
operate the business and in how we lead in the future of mobility.
Even with the positive progress weve made, we are taking proactive
steps to get ahead of the curve by accelerating our efforts to address
overall business performance," said Morrissey in a statement.
He said GM is trimming "while our company and economy are strong. The
voluntary severance program for eligible salaried employees is one
example of our efforts to improve cost efficiency."
Through the third quarter, GM has hit $6.3 billion of the total $6.5
billion in cost efficiencies it is targeting by year end, CFO Dhivya
Suryadevara said.
https://www.freep.com/story/money/cars/general-motors/2018/10/31/gm-buyouts-salaried-workers/1831530002/