GM's white-collar workers face deadline to consider buyout offer from automaker
General Motors Co. white-collar workers who want to take a buyout have a noon deadline Friday. But they could end up waiting up until March 31 to know whether GM will let them stay or go.
For some, the last day of work could be as early as April 1. But some who accept the voluntary buyout will be required to stay beyond April 1 to assist in the transition of their work duties at GM. All would leave by June 30.
GM salaried employees have been able to change their mind during the window of the offer, which began March 9 until March 24, but at noon March 24, decisions will become final, according to Maria Raynal, a GM spokesperson.
The final decision on who stays or goes rests with the automaker's executives.
“If there is an important business reason to retain a person, they can deny the employee’s expression of interest. If employees are turned down for separation it means that leadership sees them as important to the organization going forward,” according to an FAQ obtained by the Free Press that GM supplied to employees.
Financial planners across Michigan and other parts of the country spent the past two weeks talking with existing clients and reaching out to new ones as GM salaried employees weighed one of the biggest financial moves of their careers: Stay or go?
Could my job get cut later?
"The biggest concern we've heard revolves around the 'what if' factor," said Jack Riashi Jr., a financial adviser with Bloom Advisors in Farmington Hills.
What if they don’t take the money offered in a buyout but later see GM cut their job? What if GM has trouble down the line reaching a $2 billion cost-cutting target? GM said the program is being offered as a "way to accelerate attrition and achieve $2 billion in cost savings by the end of 2024."
What if someone in her 30s or 40s takes the buyout but cannot find a new job after the buyout money is gone?
More:GM puts generous buyout on the table: What salaried workers should consider
More:Chevrolet will end Camaro production in 2024 as it shifts to electric lineup
The employees, Riashi said, who seem to be the least likely to take the buyout are the ones who are confident in their role at the company.
How will this impact me but also my co-workers?
GM employees aren't reflecting publicly on how they're handling the pressure to make a decision or what they feel about the terms on the table. One salaried employee told me she wasn't able to make a statement given GM's strict rules on the process. Employees were instructed by GM in an FAQ to not comment to the media about the buyout.
GM made the offer to a majority of its 58,000 U.S. white-collar employees.
More:GM looks to hire tech talent from massive job cuts in Silicon Valley
More:GM job cuts leave some employees distraught, analysts unimpressed
David Kudla, CEO of Mainstay Capital Management in Troy, said phones have been ringing consistently and the firm's staff has been working 10-hour to 12-hour days to answer questions, as GM employees have had just two weeks to make a big decision.
"Many who are within a year of their planned retirement are taking the voluntary separation program," said Kudla, who says his firm has answered questions for hundreds of GM employees.
"Those who were within a couple years of retirement are considering the offer, and many are taking it."
Part of the conversation, he said, often involves wondering what leaving the company soon would mean for co-workers or how leaving might impact a specific vehicle program where the GM salaried employee is directly involved.
"What I have found that is very admirable is the loyalty to GM, their vehicle program and fellow employees," Kudla said.
GM initially rolled out the generous buyout offers — putting up to 12 months of severance on the table for those with 12 years or more of service — on March 9 to salaried employees in the United States with five years or more of service as of June 30. Severance is one month of pay for every year of service up to 12 months of pay, paid as a lump sum.
A buyout offer is being made to all GM global executives with at least two years of service, as well.
The offer applies to GM salaried employees, not hourly. Contract talks between GM and the United Auto Workers union will take place this year; the contract exprires in September.
Can I keep the cellphone?
The FAQ, which was updated March 13, included questions from GM employees like: What if I missed the June 30 cutoff for the five-year length of service by just a few months? Can I get a buyout? Answer: No.
Question: Are “salaried represented” included in the program? Answer: Yes.
Question: “Since the medical COBRA equivalent will be paid in a lump sum, will I receive money to offset the applicable taxes?” Answer: No.
GM earlier told employees that those enrolled in the company’s group medical plan will receive an additional lump sum that equals their monthly cost to continue group health benefits under COBRA, for every year of service up to 12 months.
Question: “Can I keep my GM issued cellphone upon termination?” Answer: “No, you cannot keep your phone, but you can keep your number.”
Steve Azoury, owner of Azoury Financial in Troy, said he has heard from about a half a dozen people who work at GM. For one woman who is 61, he said, the buyout figure was around $115,000 and sounded pretty good. She had been with the company for 10 years.
But told her that she shouldn't take the buyout. She was making good money and the buyout, in his view, was not enough money to give up a job for someone who wants to keep working.
"Then again, if she keeps her position, what’s keeping General Motors from tapping her on the shoulder in two months and walking her out? It’s a tough call for those in this situation," Azoury said.
Daniel Milan, managing partner and investment adviser representative at Cornerstone Financial Services in Southfield, said the firm has heard from about 15 GM employees.
"As always, the older someone is, the more likely they are to accept the offer," Milan said.
The deadline gets real
Financial advisers like Sam Huszczo said some clients started reviewing their options just a week ago.
"Then over the weekend, this deadline got real for people," Huszczo said Thursday. "I will have been working from 7 a.m. to 10 p.m. for four days straight, including today." He was set to meet with 20 employees through Thursday.
Some people, he said, appear to be really on the fence.
One GM employee was on luxurious vacation in the sun for two weeks when the news broke but hadn't been checking the phone or emails. He returned home to find out about the buyout on Tuesday.
"He walked into a hornet's nest," Huszczo said.
The rumor mill, according to some GM employees that he's talked with, seems to indicate that upper management isn’t getting the number of takers that they were hoping to get at this point.
But Huszczo said it's very likely way too early to tell, as most people planning to take the offer won't officially put their name in until Thursday evening or Friday morning.
Many clients within two years of retiring anyway, he said, seem to be more willing to take the offer.
Some had been looking for other jobs before this news and had serious irons in the fire. Some younger employees want to switch to new opportunities in new industries.
Many who have had a tougher time deciding, Huszczo said, are those long-term GM salaried workers who might be three to five years away from the day they once wanted to retire.
“This is too short of a time frame to make a decision on something that’s been in your life for 25-plus years,” Huszczo said. “And it feels rushed from their vantage point. The default setting for people feeling rushed is to do nothing, to avoid a mistake.”
Contact Susan Tompor: email@example.com. Follow her on Twitter @tompor. To subscribe, please go to freep.com/specialoffer.
This article originally appeared on Detroit Free Press: GM buyout offer: Employees look at noon Friday deadline