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.