The auto industry is facing rising costs due to inflation, the chip shortage and various production setbacks, which has led Ford to lay off 3,000 employees globally – the vast majority of them in Michigan. GM has no plans to follow in its arch rival’s footsteps, however, with a spokesperson confirming it has executed other cost reduction measures and will not lay off employees in the near future.
Speaking to The Detroit Free Press, GM spokesperson Maria Raynal said the automaker is “not planning layoffs,” and that has been “proactively managing,” spending since the pandemic-driven economic downturn in 2020.
Additionally, GM underwent a major restructuring in 2018 that saw it cut costs by canceling several vehicle lines, including the Chevy Cruze and Impala, and closing its manufacturing plant in Lordstown, Ohio. It also offered buyouts to roughly 18,000 salaried employees at this time. Other measures it has taken in recent years to free up capital include pulling Holden out of Australia and New Zealand and closing its plant in Thailand.
Raynal said GM will be more conservative with its hiring practices going forward as it looks to manage spending, limiting hiring to “critical skill sets,” necessary to meet its goals. The automaker has hired roughly 7,000 salaried workers this year as it looks to grow its Ultifi in-vehicle software platform and expand its software business.
GM announced last week that it would reinstate its dividend payments to shareholders, a practice that it put on hold amid the economic pressures of 2020, which is typically viewed as a sign of strength. The automaker also said that it would once again undertake “opportunistic,” share buybacks amid increased confidence in the market, increasing the capacity of its repurchase program from $3.3 billion to $5 billion.
“GM is investing more than $35 billion through 2025 to advance our growth plan, including rapidly expanding our electric vehicle portfolio and creating a domestic battery manufacturing infrastructure,” GM CEO Mary Barra said in a statement last week. “Progress on these key strategic initiatives has improved our visibility and strengthened confidence in our capacity to fund growth while also returning capital to shareholders.”
GM’s chief financial officer, Pual Jacobson, echoed Barra’s confidence in the market in announcing the return of the dividend.
“GM’s consistently strong earnings, margins and cash flow, our investment-grade balance sheet, and the achievement of several significant milestones in our growth strategy enables us to invest aggressively to accelerate our all-electric future while also supporting the return of excess free cash flow to shareholders, aligned with our long-term capital allocation strategy,” he said.
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Comments
I’ll give them a lot of credit if they can transition to EVs without laying off thousands. That would be a major feat.
I have seen and heard 3000-8000 layoffs could happen.
Remember, GM sold Opel, which did a lot of their small car and small engine work to Stellantis which has laid off around 4,100 employees at this point. Back-door cuts.
They cut 2500 last year. Ford just took longer to do it. GM also used the excuse as “Covid” while ford is using the excuse of “EV mageddon”
I have seen articles in various news posts that Ford expects to cut 35% or more of its workforce if they get to all ev’s. All the car companies I feel are licking their chops at the production cost savings with all ev products. They can’t wait.
Ford has some major financial issues facing them.
They fooled many with the Mach E and Lighting but these are not the true Ford EV future. They were just programs to make it look like they were leading when the truth is they are about 3-5 years behind and just don’t have the money like GM to do a complete EV program.
These will not be the only Ford layoffs as they will need more money. The F series trucks are not as profitable as they once were. The Bronco and Maverick issues have slowed production and needed profits from them.. Loans are still outstanding with banks and the Energy department.
If Ford was not 51% owned by the Ford family they would really have been in trouble.
I look for them to proceed with their EV platform they are working on now but they may have to partner to get it fully done.
California is voting today to eliminate new gas car sales and 11 more states are going to follow their move soon and all of them represent 1/3 of the auto market.
The only thing that may pull back things is if the courts find that California can not override federal rules but that case was lost once before.
I thought Ford and VW already teamed up for EVs and associated cost-sharing/co-design? Did I hallucinate that article?
Just on Euro delivery vehicles.
Ford is not 51% owned by the Ford family. They have 40% of the VOTING RIGHTS by virtue of their Class B shares which are exclusively owned by the Ford family. Each Class B share is worth 10 votes vs a single vote for Common A shares which is the public traded stock.
In terms of actual share count, the Ford family owns between 4-5% of the outstanding shares. All Class B shares (as stated above) plus a minor position in Class A shares.
Ford is going through the same salaried employee dump that GM did a few years ago (which was much larger) so they’re a couple years behind GM in terms of reducing structural costs and dedicated EV platform development.
Ford’s largest near term issue is product quality. They have significant flaws in their product development processes starting with program timing targets seemingly taking precedence over engineering quality gate-checks, SQA efforts and problems continuing all the way through manufacturing engineering. They really need to re-examine and instill serious discipline in those processes. There’s a real question whether they lack the leadership and talent necessary to make those changes. Some of the downstream quality control band-aides they’re instituting do nothing to address the route cause of their quality issues which cost them close to $3B a year. An outrageous number.
This obviously isn’t a Ford forum but since you mentioned it….
Ford is hilarious. They think they’re going into the EV dealership business. They didn’t learn from history. In the late 90’s, they bought all of the stores in the Indianapolis area. They ended up losing millions of dollars and they sold the stores. People drove out of town to buy from non Ford owned stores. 🤣
“…….pulling Holden out of Australia and New Zealand” ?? What? The Holden brand was closed completely! It was eliminated! Lil’ gm has exited that market completely except for a handful of specialty vehicles.
Thailand – most likely they closed that plant, because they were told to by the Chinese. Great Wall moved in very quickly…….
Despite GM pulling out Holden, the formally issued a statement committing to GM Australia engineering, and protecting their jobs with a new investment in Lang Lang.
I have no idea why the comments discussing it were removed, and I’d like an answer to it.
I don’t trust GM corporate speak. We will see…
They said the same thing to the Australian engineering team after Holden, even put a press release out touting their jobs were safe.
They were laid off less than three years later, once the C8 was finalized.
I had to comment on this but seriously, 3 years later changes everything! They promise job safety for the next 6 months to a year, 3 years seems like a different situation at this point.
The press release touted how GM was committed to Australian engineering long term, and made a multi-million dollar investment in improving the Lang Lang Proving Grounds.
Disagree. Three years for that kind of commitment is a reasonable expectation. We’re talking about hundreds of employees, and facilities, and contractors, and infrastructure.
GM did cut back on engineers and added more software and electrical majors. It was only natural since so many systems are being eliminated.
Dissagree. EV’s are infinitely more complex than ICE. All the drives, cells, and accessories are infinitely more complex. The only reason that legacy auto makers would need less engineering and production capacity is because they farm out that complexity to Samsung/LG/Schneider for those parts…. Kinda like how feightliner and Volvo farm out their powertrains to Detroit diesel.
It’s way more cost effective to have it done in-house with ice. Or are we missing the massive losses on basic EV’s happening market wide???
They are less complex mechanically hence less mechanical engineers and more electronic engineers and programmers.
I don’t think it’s that clear cut. The motors and electronics in EVs still need mounts, enclosures, panels, crash protection, shields, mechanical/drive connections, insulators, connector design, etc.
Electrical and mechanical are more closely connected than some think.
GM Powertrain Bedford will be laying off 65 people in September due to the discontinuation of the GenV engine head
Come again? Discontinuation of the gen V???? Small block???? That makes no sense as it has 4-8 years left of production
They make the AFM version of the GenV. It’s being discontinued
“undertake “opportunistic,” share buybacks amid increased confidence in the market, increasing the capacity of its repurchase program from $3.3 billion to $5 billion” Opportunistic as in the best time for execs to exercise their stock options? Which comprise the majority of their compensation.
Probably will not be called layoffs but renamed something like unallocated workers or people formally know as GM employees.
Watch out for unplanned layoffs.