General Motors is offering buyouts to more than a third of its white collar staff in the United States, as the company transitions to self-driving vehicles and other new technologies.
The largest American automaker announced a voluntary job reduction program to staff after reporting strong earnings for the just completed quarter.
Business, economy and trade
Company activities and management
Financial performance and reports
Mergers and acquisitions
Labor and employment
Workers and professionals
GM employees with 12 or more years at the company -- about 18,000 of its 50,000 salaried staff in the United States -- will be given the offer. Typically about 10 to 15% of those eligible take the offers.
Although the company did not announce the buyouts as part of its earnings report, CEO Mary Barra told investors that GM (GM) would be taking "steps to transform the workforce to ensure we have the right skill sets for today and the future while also driving significant efficiency."
GM has not disclosed the details of the offer, but typically it is a formula that offers a certain amount of weekly pay for every year of service.
GM and other automakers are making a major push to develop self-driving vehicle technology along with electric vehicles and ride sharing services. GM has created a separate company called Cruise for those efforts. The company expects to spend $1 billion on Cruise this year.
GM is also dealing with some higher costs associated with tariffs on imported steel and aluminum, which has raised its commodity costs by about $300 million in the third quarter, and could raise costs by $1 billion next year. There is also a threat that costs of auto parts could rise if the Trump administration goes ahead with plans it is weighing to put tariffs on imported vehicles and parts.
Rival Ford (F) similarly cut salaried staff globally, though it has also not given any details about the extent of job cuts it plans. It has said it expects to spend $11 billion over the next three to five years to reshape its business, but it has not given details as to the changes it plans.
The automakers have not announced plans to offer buyouts to hourly production workers at their factories, which would require an agreement with the United Autoworkers union.
- GM offers buyouts to 18,000 employees
- Beachwear buyout: Quiksilver is merging with Billabong
- Kilauea volcano erupts, Hawaii hands out 18,000 ash masks
- Korean Air 'nut rage' scandal: Flight attendant awarded $18,000 settlement
- Tax law to spark $450 billion buyout bonanza for Wall Street
- Philippe Coutinho to have $481 million buyout clause after Brazilian joins Barcelona from Liverpool
- $10,000 reward offered in the case of missing CDC employee
- $15,000 reward offered in the case of missing CDC employee
- GM and Boeing push stocks into reverse
- Cyber Monday; GM overhaul; Ghosn ousted, again