GM offers buyouts to most U.S. salaried workers to trim costs
DETROIT — General Motors is offering buyouts to most of its U.S. salaried workforce and some global executives in an effort to trim costs as it makes the transition to electric vehicles.
The Detroit automaker wouldn’t say how many workers it is targeting, but confirmed that the move is aimed at accelerating attrition to meet a previously announced goal of $2 billion in cost cuts by the end of next year. GM has about 58,000 salaried workers in the U.S.
The company says the offers also are designed to avoid any possible firings at a later date. CEO Mary Barra told analysts in January that GM doesn’t wasn’t planning for any layoffs.
Offers will go to white-collar workers with at least five years of service, and global executives who have been with the company at least two years.
The decision to offer buyouts comes at an uncertain time for the auto industry, which is in the midst of a transition from internal combustion to electric vehicles. GM has a goal of selling only electric passenger vehicles by 2035.
The switch is requiring more research and development spending on both types of vehicles, as well as huge capital outlays for battery factories and updating assembly plants, as well as spending to get scarce metals needed for EVs.
The $2 billion in cost cuts, announced with GM’s fourth-quarter earnings, also are being made to prepare for any potential economic downturn or recession, Chief Financial Officer Paul Jacobson told an analyst conference in February. He also said the cost cuts would be accomplished in part by filling only strategically important jobs vacated due to attrition. Although GM’s auto sales remain strong, the company is seeing prices for its vehicles starting to ease, he said.
“We want to be cautious because we don’t want to ignore the macro signs that are out there, because I don’t want to be up here a year from now saying, ah, we missed it,” Jacobson told the Wolfe Research conference.