General Motors has offered voluntary buyouts to 18,000 salaried employees in North America who have at least 12 years of experience, as the automaker looks to cut costs all while investing in its electric and autonomous future.
The company has described this as a proactive measure aimed at preparing for coming headwinds such as slow sales in North America and China, commodity prices and tariffs.
But it’s just as much about preparing for the future. The company has been undergoing a transformation over the past four to five years, ditching expensive, money-losing programs like the Opel brand in Europe, and investing more into electrification and autonomous vehicle technology.
And it’s not wasting any time.
GM is giving these employees until November 19 to decide whether they’ll take the buyout offer. Those who accept will receive severance beginning February 1, 2019.
About 36 percent of the company’s 50,000 employees in North America are eligible for the buyout. A GM spokesman declined to say how many employees it expected to take the buyout, except to predict that it was unlikely the number would be anywhere close to 18,000.
GM has been on a three-year $6.5 billion cost-cutting mission that it expects to hit by the end of the year. GM CFO Dhivya Suryadevara said in the company’s earnings call Wednesday that GM had made $6.3 billion in cost-saving measures as of the end of the third quarter.
GM’s cost-cutting measures have happened in parallel with its investments and commitments to electrification and autonomous technology. GM acquired Cruise Automation for $1 billion in 2016. Earlier this year, the automaker said it would invest another $1.1 billion into its self-driving unit as part of a bigger deal with SoftBank. Cruise Holdings has said it will launch a commercial autonomous vehicle ride-hailing service in 2019.
It has also focused on hiring more software engineers, and will continue to add those kinds of jobs even as the buyouts begin, according to GM.
GM’s plan is to launch 20 new all-electric vehicles globally by 2023 and increase production of the Chevy Bolt. At an event in September, GM chairman and CEO Mary Barra said the company is poised to build more all-electric vehicles as improvements continue at its recently expanded battery lab and a new LG Electronics plant in Michigan comes online.
The LG Electronics facility in Hazel Park will start making battery packs this fall to supply GM’s Orion Assembly Plant, where the automaker builds the all-electric Chevrolet Bolt.