The deadline for 18,000 salaried General Motors employees to accept buyouts passed on Monday.
As part of GM’s buyout offer announced late last month, employees who qualify for the program could take home six months worth of salary and health benefits starting this coming February. But according to a report from The Detroit News, on a case-by-case basis, GM has been allowing some employees to leave early allowing them to enjoy an extra two months worth of severance.
The GM buyouts come part of a company-wide cost savings target. Managers from departments across GM were given specific targets they needed to hit by the end of the year, which left them with two choices: cut the departments discretionary spending or start offering buyouts. There isn’t a specifically targeted headcount post-buyout, instead, the alleged value lay in the rather simple raw cash savings that come from not having to pay these employees in the future.
A GM spokesman told the publication the corporation would consider layoffs if the appropriate cash isn’t accounted for by early next year. The GM buyouts were offered to salaried workers in North America and global executives with at least 12 years of experience, but it seems likely the company will be forced into layoffs given the reportedly low take-rate of the white-collar buyout programs. Despite the deadline being earlier this week, the automaker says it likely won’t report the cost savings or job losses until at least next month.
As the GM buyouts were conjured up, the company has aggressively recruited and hired workers in recently developing auto disciplines including software development, battery, and fuel-cell technologies over the last five years, a result which may be causing conventionally untouchable industry jobs to go extinct. With consistent profits and large margins, now may be the best time to preempt those future costs, instead of being forced to react to an industry contraction.
“The best time to solve a problem is the minute you know about it,” CEO Mary Barra said at The New York Times DealBook conference earlier this month. “Most problems don’t get smaller with time — and so that’s kind of a fundamental learning.”
Make no mistake about it, the drive to cut costs is very closely intertwined with GM’s desire to remain competitive on the new technology front. The company’s vision for the future includes fat returns for investors and buckets of money poured into driverless and emission-free vehicles. Or at least that’s what the market wants to hear.
But it could always be worse. Just look at Ford, where CEO Jim Hackett has promised job losses to an unannounced number of the company’s 70,000 global salaried employees as part of his phantom plan to trim $25.5 billion in operating costs.
Comments
Here’s what’s frustrating as hell about GM right now. I stopped in at my dealer about 2 weeks ago for an oil change, and ran into my salesman during drop off. He told me they still didn’t have sales brochures for the new Silverado. This vehicle has been in production since mid-July, and three months later – still no brochures. The same goes for the new Cadillac XT4, no brochures and this has been in production for a little less longer than the new trucks. He also claimed that there were no lease incentives/programs on the new truck and that his dealership hadn’t sold or leased any new body style Silverados. Their overflow lot is full of the new trucks and they get new deliveries weekly. I want to lease a new truck and an XT4 for my wife, but can’t get any deal on product my company builds. GET OFF YOUR REAR END GM CORPORATE
At least you have build and price available on the US website, not here in Canada.
brochures are somewhat low tech, most shoppers get their info online nowadays
Brochures? I didn’t realize people still wanted/needed brochures. What is the point of that when we have the internet which gives you an interactive and highly detailed experience that is 10 times better than any brochure could ever be. I have a feeling you are going to be waiting a very long time for one…
I don’t know why they don’t have any lease incentive programs except it is possible they are seling so well they don’t need one. I know you mentioned they haven’t sold any of the new Silverados but I think you are probably either misinformed on that or they are purposely holding them back until they clean up old inventory.
another thing…Once the new blazer and trucks launch at the mexico assembly plants, all three non-US plants will be running 3 shifts and 6 days a week. When Mary B talks about employees being the company’s #1 asset, she’s obviously talking about the vast non-American work force.
But but… These vehicles are “Made in America”..
The lie detector test has determined, THAT IS A LIE.
Everyone is upset that GM and Ford are ramping up production in their non US plants but nobody wants to talk about the ugly truth of how much it costs to emply a bolt turner here in the US. By the time you’ve paid the union’s mandated pension and health care plan you simply cannot make enough money by building these cars in the US. Sorry but the truth hurts. When a ton more money can be made by going to Mexico why wouldn’t they do just that? Unfortunately the cost of living and, more importantly, what American workers expect to be paid as a minimum in wages and benefits is so much higher/better than the rest of the world’s workers that we cannot possibly compete. I mean we expect to have the latest Iphone, a 50″ big screen TV with 500 channels, a 2000 sq ft house, a $30,000 car and enough money to retire at 65 and take a couple of nice vacations annually. Yeah, go ask people in Mexico or Asia if they get even 1/10th of things of that nature. Our standard of living at the lowest levels is WAY TOO HIGH to compete these days. It is a consequence of our success and dominance over the last 100 years…