The GM buyout package offered to some 12,000 North American-based, salaried employees will likely test the automaker’s morale in the months to come.
The Detroit News reported Tuesday that not only does the GM buyout package underscore where the automaker can afford to scale back, but tests GM as it moves to become a larger player in the technology industry.
Harley Shaiken, a professor specializing in labor issues at the University of California at Berkeley, said, “The value of morale in a company that is increasingly a player in a high-tech universe is critical. This isn’t simply a money-saving decision, it’s about what’s GM’s culture going forward.”
GM has continued to transform its workforce in the past few years with new hires focused on the company’s self-driving car business at Cruise Automation, connectivity, and electric powertrains.
And the automaker is moving to enact the cuts now before it’s too late. While the automaker has enjoyed record profits and a booming auto industry for the latter half of the decade, a slowdown is expected. GM wants to shed fat now before it’s too late and the buyouts signal a silent alarm of sorts.
The deadline for employees to take the buyout package passed this past Monday, and it’s been reported GM fell short of an internal quota it hoped to reach. The automaker reportedly aimed for 7,000 employees to take the buyout package, while only some 4,000 opted in. The package is also identical to severance for laid-off workers, which may have contributed to the low take rate.
Now, inside sources at the automaker have said GM could move to lay off 3,000 workers to meet its cost-cutting objective. However, the GM culture shift is apparent at its self-driving car subsidiary, Cruise Automation. Cruise has been earmarked $1 billion this year and $500 million will be spent on new hires.