GM Offers Buyouts to US Workforce, 'Involuntary' Cuts Possible If Not Enough Accepted
An internal memo sent to employees by CEO Mary Barra outlines the company's aggressive cost-cutting strategy.
Update 1:04pm: The Drive has acquired a partial image of an internal memo sent by GM CEO Mary Barra on Thursday morning. The memo outlines some of the automaker's current and future cost-cutting plans.
General Motors has offered thousands of senior employees severance packages as part of a cost reduction initiative. The American automaker, who originally set out to reduce costs by $6.5 billion by the end of the year, currently sits at $6.3 billion, just $200 million away from its goal.
As many as 18,000 of GM's 50,000 employees in North America were issued the offer, according to The Detroit News, which states that only employees with 12 years' tenure (as of December 31, 2018) or more were targeted. Recipients of buyout offers have until November 19 to take GM up on its offers, the details of which are not public. After the take rate is determined, GM says it will "evaluate the need" for further employment reduction programs, including possible layoffs.
"We've been on a journey to transform the company, both in how we operate the business and in how we lead in the future of mobility," the automaker was quoted as having stated on Wednesday. "Even with the positive progress we've made, we are taking proactive steps to get ahead of the curve by accelerating our efforts to address overall business performance."
"We are doing this while our company and economy are strong. The voluntary severance program for eligible salaried employees is one example of our efforts to improve cost efficiency."
An internal GM email acquired by The Drive confirmed that the automaker is offering the severance packages to employees who have been under the company's wing since Dec. 31, 2006, or earlier.
One potential purpose for the cost reduction program is to invest a greater proportion of company revenues into electric vehicle and autonomous driving technologies—both fields in which GM is a strong competitor. The automaker also has an extensive alliance with Honda as a technical partner; the two have built a relationship encompassing fuel cell technology, electric vehicles, and autonomous driving since the start of 2017.
- RELATEDGM Could Be Shifting Toward Electric Sooner Than ExpectedThe automotive giant has advocated for change on the national level.READ NOW
- RELATEDGeneral Motors Files Trademark on 'Chevrolet FNR' Name Previously Attached to Exotic EV ConceptRemember Chevy's super sci-fi concept car from 2015? General Motors just filed for a trademark on its name.READ NOW
- RELATEDGeneral Motors Calls for National Zero Emissions Vehicle ProgramThe program would set quotas for electric-car sales.READ NOW
- RELATEDFour Bicyclists in Critical Condition After Being Struck by Chevrolet in FloridaThe Florida Highway Patrol said the driver of the Chevrolet was a woman in her 90s.READ NOW
- RELATEDChevrolet Goes Retro-Futuristic With Electrified eCOPO Camaro Drag Car at SEMA 2018The car boasts 700 horsepower and a sub-10 second quarter-mile.READ NOW