Yahoo Autos General Motors Offers Buyouts Just after Posting Massive Net Profit
General Motors, after a profitable third quarter that handily beat expectations, is offering buyouts to 18,000 employees across North America, the company said on Wednesday.
The buyouts, which GM calls a voluntary severance program, are not early retirement packages but preemptive efforts to slash costs "while our company and economy are strong," according to a statement.
"Even with the positive progress we've made, we are taking proactive steps to get ahead of the curve by accelerating our efforts to address overall business performance," the company said.
Starting today, salaried employees across all divisions in the United States, Canada, and Mexico who have worked at GM for at least 12 years will receive the offers. Hourly workers are exempt. The employees have until the end of November to accept, and if so, must agree to leave GM by the end of the year. While GM does not expect the majority of those 18,000 eligible employees to leave, the automaker said it will consider layoffs in 2019 if there aren't enough volunteers.
"We will evaluate the need to implement after we see the results of the voluntary program and other cost-reduction efforts," the company said.
GM posted a blowout third quarter with net income of $2.5 billion-25 times greater than last year’s third quarter-and nearly $20 billion in cash. 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.
Until now, GM had spared its home base from overhead cuts while tearing apart the company overseas during the past five years. In February, GM Korea offered employee buyouts before closing a plant in May. Last year, GM sold Opel and Vauxhall to Peugeot and Citroën, exited the South Africa and India markets, pulled out of East Africa, cut employees in Singapore, and dismantled Holden sales and manufacturing in Australia. In 2016, it removed Chevrolet from Europe. The automaker is also still on the hook for its deadly ignition switches and recorded a $440 million charge in the third quarter for the related ligitation.
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