The voluntary severance program was announced after the automotive company’s third-quarter earnings report came out where it reported an operating profit of $2.5 billion and 10.2 percent profit margins in North America, reports Fortune.
General Motors has about 50,000 workers in the U.S., Canada, and Mexico. The buyout program will affect about one-third of its workforce. Employees have been given until November 19 to decide if they will accept the buyout, and if not enough people opt for the severance package, GM will start laying off workers.
Sadly, the news comes right ahead of the holiday season and will certainly cause concern for many families, however, it doesn’t appear GM is planning to make any immediate cuts to its workforce aside from the buyouts.
“Even with the progress we’ve made, we are taking proactive steps to get ahead of the curve by accelerating our efforts to address overall business performance. We are doing this while our company and economy are strong. The voluntary severance program for eligible salaried employees is one example of our efforts to improve cost efficiency,” the company said, according to CTV News Canada.
As for anyone being laid off, company spokesman Patrick Morrissey wouldn’t say if GM was trying to reach a target number of employees, nor would he say when GM would start layoffs if not enough workers came forward to accept the buyout.
Retired Chief Financial Officer Chuck Stevens talked about the possibility of cutbacks in the workforce last April. In an earnings conference call, he told analysts that GM is looking for cuts as it simplifies its business after its exit from Europe. Simplification “will allow us to take significant structure out of the business, whether it’s corporate staff, whether it’s engineering staff.” He was referring to GM’s sale of the European Opel and Vauxhall units to France’s PSA Group.
Back in June this year, GM warned the Trump Administration that the steel tariffs could lead to fewer jobs and lower wages for the automotive industry. And at the same time, Trump was threatening to impose tariffs on imported cars, a move analysts thought was intended to pressure Mexico into renegotiating the NAFTA trade pact. GM was also against that move by the administration, although an aide to President Trump laughed off GM’s concerns as “smoke and mirrors.”
