Tuesday, 20 November, 2018

GM is looking buyout several thousand workers

GM Offers Buyouts to 18,000 Workers, Months After Warning About Layoffs Over Trump's Tariffs General Motors offers employee buyouts
Nellie Chapman | 03 November, 2018, 07:18

GM reported a $2.5 billion third-quarter net profit Wednesday, or $1.75 per share. "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. GM declined to disclose the number of people it wants to take the buyout offer or the buyout program's expected cost.

After the November 19 deadline, it will evaluate whether layoffs are needed.

GM announced the offers on Wednesday, the same day that the automaker's third quarter results were released, showing a strong third-quarter profit. Shares that had been falling since June rose $3.20, to $36.73.

The company has 50,000 salaried workers in North America.

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.

GM's move to cut staff stood in contrast to an upbeat profit outlook and its recent success in raising prices, which boosted profit before tax by $1 billion overall in the quarter, mostly in North America.

Revenue jumped 6.4 percent to $35.8 billion, also topping forecasts.

GM International posted an operating profit of $139 million in the quarter, driven by record equity income in China of about $500 million despite the slowdown there.

GM's global retail sales to individuals, on the other hand, dropped 15 per cent during the quarter, to 1.98 million vehicles. The company posted a $579.02 million charge as it updated estimated costs for legal claims. That's down from 90,000 a year earlier, before GM sold its European operations to PSA Group. Wednesday, it said it would make $6.5 billion in reductions for 2018.

The company strives to continue churning out profits through vehicle sales while, at the same time, investing in new technologies such as electric or autonomous cars.

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.

In July, GM lowered its full-year forecast, citing higher steel and aluminum costs due to tariffs. Simplification "will allow us to take significant structure out of the business, whether it's corporate staff, whether it's engineering staff".