General Motors' Buyout Program Behind Schedule, Layoffs Threatened: Report
General Motors offered buyouts to as many as 18,000 longtime employees last month, but only about 4,000 reportedly accepted the offer.
General Motors' senior employee buyout program is reportedly behind schedule, portending layoffs.
At the end of October, GM CEO Mary Barra sent out an email to as many as 18,000 employees who have been with the company since Dec. 31, 2006 or earlier, offering buyout packages as part of a cost reduction initiative, which was just $200 million shy of its $6.5 billion goal at the time of the email.
GM's deadline for acceptance of the offer was Nov. 19, after which it said it would evaluate layoffs for some of those who didn't opt for the buyouts. Buyouts reportedly entail six months' pay and healthcare, provided the employee stays with the company through Dec. 31 of this year. Employees with critical skillsets will reportedly be barred from accepting buyouts if they volunteer for them, however.
The company's target for the buyout program is 7,000 employees according to the Detroit Free Press, but takers numbered only around 4,000 as of deadline day. A source reportedly informed DFP that managers told employees in meetings on Thursday and Friday of last week that layoffs for the other 3,000 could start Jan. 15.
"GM (leaders) haven't decided what they're going to do if there is a shortfall—if they don’t hit 7,000," the source told DFP. "They said they may start the process in mid-January for involuntary releases."
"GM will complete the voluntary buyouts by November 29," another source told the publication. "The managers we've talked to are already making their list and will select their cuts in January."
Auto industry advisor and economist Jon Gabrielsen told DFP that he predicts an auto industry slump within the next three years, resulting in 7,000 lost salaried positions at GM, and another 7,000 paid-hourly jobs depending on the severity of the decline.
GM is believed to be reorienting the money saved on its cut employees toward electric powertrain and autonomous driving technologies. All automakers predict large-scale investment into these technologies will handicap profits in the near future, regardless of whether they expect to go fully electric or anticipate internal combustion will remain a part of their product lineups.
- RELATEDGM Offers Buyouts to US Workforce, 'Involuntary' Cuts Possible If Not Enough AcceptedAn internal memo sent to employees by CEO Mary Barra outlines the company's aggressive cost-cutting strategy.READ NOW
- RELATEDGM Lordstown Assembly Plant in Ohio Clings to Dear Life as Cruze Sales PlummetAfter over 50 years in operation, employees have launched a 'Drive it Home' campaign to highlight their importance.READ NOW
- RELATEDGM on Chevy Silverado 4-Cylinder Fuel Economy: Don't Look at the EPA RatingThe company claims the pickup's real-world mileage will top its middling rating.READ NOW
- RELATEDFaraday Future Employees Start GoFundMe Campaign to Endure Mass LayoffsThe startup began laying off employees and cutting salaries of remaining ones after a major Chinese backer bailed.READ NOW
- RELATEDFCA Boss Admits Mistakes Behind Maserati's Monumental Sales SlumpMaserati sales fell 87 percent last quarter.READ NOW