General Motors (GM) announced on Monday that it is offering buyouts to a “majority” of its salaried employees in the United States. The move comes as part of the automaker’s ongoing efforts to restructure and streamline its operations in response to changing market conditions and new technological developments.
In a statement released on Monday, General Motors said that it is “offering a voluntary severance program to eligible salaried employees in North America with 12 or more years of service.” The buyouts are expected to affect a significant portion of GM’s white-collar workforce in the United States, although the company did not provide specific numbers.
Why was this decision taken?
The automaker’s decision to offer buyouts to its salaried employees comes amid a broader shift in the industry towards electric and autonomous vehicles. General Motors has already committed to investing heavily in electric vehicle technology, and has launched several new EV models in recent years. However, the company faces increasing competition from new players in the market, including Tesla and several Chinese automakers.
General Motors has also been grappling with a slowdown in global demand for cars and trucks, as well as rising costs associated with tariffs and trade disputes. The company has already announced plans to shutter several factories in North America, including plants in Ohio, Michigan, and Maryland, as part of a broader restructuring effort aimed at reducing costs and improving profitability.
The latest round of buyouts is part of this broader restructuring effort, which GM CEO Mary Barra has described as a “transformation” of the company’s operations. In a recent interview, Barra said that General Motors is “continuing to take proactive steps to improve our overall business performance and reshape our company for the future.”
How will it help the company?
The buyouts are expected to help GM reduce its workforce and cut costs, although the company did not provide specific targets. In its statement on Monday, GM said that the program is “designed to enable employees to make decisions that best align with their individual career goals while providing GM with greater flexibility and agility.”
GM has not disclosed how much it expects to save through the buyouts, or how many employees it expects to participate in the program. However, the company did say that it expects to take a charge of up to $500 million in the fourth quarter of 2018 as a result of the program.
The buyouts are open to salaried employees in North America who have at least 12 years of service with the company. Those who choose to participate will receive a severance package based on their years of service, as well as other factors such as their job level and location.
General Motors said that it expects to complete the buyout program by the end of the year. The company has also said that it is continuing to evaluate other cost-cutting measures, including additional plant closures and layoffs.