GM Offers Buyouts to U.S. Salaried Workforce to Cut Costs
General Motors announced Thursday it will offer buyouts to a majority of its U.S. salaried workforce in an effort to save $2 billion by the end of next year. All U.S. salaried employees with at least five years of service are eligible for one month pay for every year of service up to 12 months and COBRA health care benefit. They will receive a portion of their performance bonus and will have access to job search assistance. Employees worldwide will be given a base salary, incentives, health insurance continuation (COBRA) and job transitioning services (outplacement).
A GM spokesperson told CNN that the voluntary separation program will be made available to U.S. salaried employees who have been with the company for five years or more, as well as global executives who have been with the company for at least two years. The company stated that employees should “strongly encouraged to consider” the program.
Mary Barra, CEO of GM, declared on an earnings call back in January that the company had no intention of carrying out any layoffs while they are aiming to reduce their costs by $2 billion during the next two years. But the Detroit automaker is now cutting about 500 executive-level and salaried jobs, The Detroit News confirmed Tuesday.
In the memo obtained by Automotive News and confirmed by GM, Barra stated that the buyouts are “designed to accelerate attrition in the U.S.,” Workers have until March 24 to consider the offer, and those who accept will leave the company by June 30, GM said.
GM is presently investing billions of dollars in electric vehicles. The Detroit car manufacturer forecasts that capital expenditure in 2021 will be between $11 billion and $13 billion, an increase from the originally forecasted $9 billion to $10 billion. A large portion of that is designated for electric vehicles General Motors has increased its budget for electric and autonomous vehicles, now planning to invest more than the $35 billion it had previously announced it would spend between 2020 and 2025.
Barra is presenting the buyouts as a strategy to hasten the rate of personnel reduction among GM’s U.S. staff. The company has stated that the buyouts will offer workers the chance to pursue a different career path or retire sooner. GM's spokesperson emphasized that the buyouts are voluntary, while simultaneously suggesting that “employees are strongly encouraged to consider the program.“
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