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About 5,000 white-collar workers at General Motors are taking up the company’s buyout offer, which the automaker says is enough to avoid layoffs this time.
GM said Tuesday that the deal would save about $1 billion a year, about half of the $2 billion it wants to cut annually by the end of 2024. The company currently has about 58,000 payroll workers in the U.S.
In a statement, GM said the purchase affects U.S. payroll employees and global executives. The company declined to provide CBC News with details of where the affected employees were from; it is not clear if any Canadian workers have taken buyouts.
The buyouts come at a time of uncertainty 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 Detroit automaker and its competitors are making huge capital expenditures to develop and build new electric vehicles, all while continuing to make cars, trucks and SUVs with gasoline engines. They also spend a lot to get rare minerals and parts needed for EV batteries.
“The steps we are taking will allow us to maintain our momentum, remain agile, and create a more competitive GM,” the company said in a prepared statement.
“We’re creating an entire supply chain in Canada so auto workers in Ontario can build electric vehicles,” Prime Minister Justin Trudeau said Monday after a GM factory converted to the first electric delivery car.
GM hopes to achieve savings of US$1 billion by reducing vehicle complexity and expanding the use of shared parts in internal combustion and electric vehicles. He also plans to cut spending across the company, including for travel and marketing, the statement said.
At a Bank of America conference on Tuesday, GM Chief Financial Officer Paul Jacobson said the company would take a first-quarter cost of $1 billion because of the buyout, but said it would save $1 billion a year when workers leave later in 2023. again quickly,” he said.
Last month, GM offered buyouts to white-collar workers with at least five years of service, and global executives who had been with the company for at least two years.
Jacobson said the number of workers taking buyouts is about what GM expected. The company is making offers to meet cost goals without layoffs, he said.
“It is important that we are willing to pay for the voluntary program to encourage those who leave, who may be closer to retirement or have decided to change their career or lifestyle, at the same time doing everything possible to try to prevent involuntary or layoffs, ” he said.
“And I think we’re in a position where we’re going to be able to do that.”
GM’s statement did not completely rule out future layoffs, saying that “involuntary separation is not a consideration at this time.”
Employees who purchase the purchase must sign up on March 24th, and those approved for the package must leave by June 30th.
US salaried workers are offered one month’s salary for each year of service, up to 12 months. They will also get health insurance coverage and a portion of the bonus they will receive this year.
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