It’s been a bloody Monday at General Motors.
As part of the company’s bid to “accelerate its transformation for the future” it has announced dramatic production cuts and salaried job losses coinciding with plans to shut down three North American vehicle assembly plants. GM’s salaried workforce is expected to contract by 15 percent, with a 25 percent reduction in executive staff, as part of a massive restructuring that will cost upwards of $3.8 billion.
The targets stem from last month’s voluntary severance letter sent out to GM’s salaried workforce, targeting 18,000 positions. The General Motors buyouts were offered to salaried workers in North America and global executives with at least 12 years of experience, and can be worth as much as two months’ pay. The take rate has been reported to be stubbornly low.
The Detroit automaker officially confirmed Oshawa Assembly, Lordstown Assembly, and Detroit-Hamtramck will lose their product allocations next year, along with two additional plants outside of North America. The company is expecting cash savings of approximately $6 billion by year-end 2020 as a result of the slashing.
“The actions we are taking today continue our transformation to be highly agile, resilient and profitable while giving us the flexibility to invest in the future,” General Motors Chairman and CEO Mary Barra said in a statement. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
Most, if not all of the money saved will be poured into electric and autonomous vehicle programs as General Motors jumps headfirst into its “Zero Crashes, Zero Emissions, Zero Congestion” mantra. Some of the future moves will include expanding the use of virtual tools to lower development time and costs, more integration of vehicle and propulsion engineering teams, and consolidating global product development campuses.
Trading of GM stock was halted just prior to the announcement, but it has jumped more than 6.5 percent since resuming earlier this morning.
Comments
“Zero customers” is where it’s heading. Thanks Mary.
Hmmm… after such a good last quarter, maybe lack of sales is starting to catch up to the business. Suppose this is one way to maintain profits in the short term…
BTW, is 2 months pay considered an attractive buyout these days?
General Motors needs to bring back jobs from Canada and Mexico to the United States, the Chevy Equinox and Trax which are assembled in Canada and Mexico should have work transferred to the United States because as Donald Trump said.. it’s America First.
“The actions we are taking today continue to demonstrate my incompetence and disinterest in this role, especially as I continue to serve as a Disney board member shoehorning “strong female characters” into everything. I’ve heard your complaints and I understand. I spend way too much time micro-managing my old job in Human Resources, rather than thinking about what FCA and Ford are doing to steal market share in our most profitable segments, like pickup trucks. So, to make up for my incompetence, I’m firing my co-workers to cover up the loses I’ve costed shareholders. M’kay?”
~ General Motors Chairman and CEO Mary Barra
“Zero crashes, zero emissions and zero congestion”. More like Zero GM. Barra needs to go
to Mary FIRE HER soon before GM is out of business .. open your eyes Mary your handing the business to the imports. Mary I think you should read these comments