General Motors plans to cut costs with employee buyout offers

General Motors plans to cut costs with employee buyout offers

That's about 18,000 salaried employees with 12 or more years at GM. 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. Those who take the buyout have until the end of the year to continue with GM, with severance effective January 1.

"We are doing this while our company and economy are strong", the company said in an emailed statement.

The Detroit automaker had previously promised investors it would cut $6.5 billion in costs this year, and the buyouts would add to that total, a company spokesman said on Wednesday.

Retired Chief Financial Officer Chuck Stevens hinted at white-collar cutbacks in April of 2017 when he told analysts that GM is looking for cuts as it simplifies its business after its exit from Europe. GM reached $6.3 billion in cost-saving measures by the end of the third quarter, she said. With U.S. interest rates rising and the region having seen strong industry sales for several years, many believe U.S. demand also will begin to slow.

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

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In July, GM lowered its full-year forecast, citing higher steel and aluminum costs due to tariffs imposed by U.S. President Donald Trump's administration. The job cuts will not benefit GM until next year, Morrissey said.

GM's USA rival, Ford (F), said in early October that it plans to thin the ranks of its salaried workforce by the second quarter of next year.

Suryadevara said GM expects tariff-driven commodity price increases to cost the company $1.32 billion this year, $526.39 million in the third quarter alone. This week, the No. 2 US automaker is holding three days of meetings to discuss ways to flatten the structure of its salaried workforce and get managers to oversee larger numbers of employees. In addition, GM in June ended the second shift at its Lordstown, Ohio assembly plant, cutting 1,500 jobs.

China's industry-wide vehicle sales fell the most in almost seven years in September, stoking concerns that market could contract for the first time in decades. Excluding one-time items, the company made $2.46, far exceeding analyst projections of $1.64 per share, according to a survey by FactSet.

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