GM offers buyouts to cut costs

Share

About 18,000 of the company's 50,000 salaried employees in North America are eligible for the buyouts, the company spokesman said.

Eligible employees - roughly 36 percent of its 50,000 North American salaried workforce - have until November 19 to make a decision regarding the program.

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".

"We will evaluate the need to implement after we see the results of the voluntary program and other cost-reduction efforts", the company said. "We are doing this while our company and economy are strong".

The automaker is making the cuts in response to rising commodity costs, said CFRA analyst Garrett Nelson. The buyout program will affect about one-third of its workforce.

After 9 Years, NASA Finally Retires the Kepler Space Telescope
The engineers essentially rebooted the mission, devising a way to allow Kepler to survey new parts of the sky every few months. At first, scientists didn't discover many exoplanets , but in just a short time, Kepler discovered thousands of exoplanets .

The rise in materials costs is increasing pressure on automakers to cut costs ahead of a predicted decline in US vehicle demand after an unusually long bull market. The automaker claimed average transaction prices in North America reached an all-time record at $36,069, even as total sales in China and Europe continued to lag year over year.

Even as auto sales started to ebb in the U.S., China and elsewhere, GM said it earned $2.30 per share.

Rival Ford (F) similarly cut salaried staff globally, though it has also not given any details about the extent of job cuts it plans. The Trump administration has imposed 10 per cent tariffs on imported aluminum and 25 per cent on steel. The company is close to delivering on a promise to reduce structural costs by $6.5 billion annually by the end of this year.

Earlier this month, Ford said it would cut its 70,000-strong global salaried workforce by an unspecified number and hoped to complete the cuts by the end of June 2019. In addition, GM in June ended the second shift at its Lordstown, Ohio assembly plant, cutting 1,500 jobs. That result was in spite of the sharpest industry sales drop in almost seven years during September. Excluding one-time items, the company made $1.87, far exceeding analyst projections of $1.25 per share, according to a survey by FactSet.

Share