The majority of salaried General Motors workers were offered a voluntary buyout by the automotive company on Thursday, March 9.
Michigan makes up roughly 60% of GM’s overall salaried workforce. From global headquarters at the Renaissance Center in Detroit to the tool and die fabrication in Flint, there are 35,000 salaried workers in Michigan across 25 facilities and offices.
General Motors offered all U.S. salaried employees with at least five years of service and all global executives with at least two years of service a voluntary separation package. This filter captures the majority of GM’s 58,000 U.S. salaried employees, GM spokesperson David Barnas confirmed.
The buyouts are part of GM’s plan to reach $2 billion in cost savings by the end of 2024. The company is not disclosing a target goal for buyouts.
“The goal of the program is to accelerate attrition. It is also designed to help avoid the potential for involuntary actions,” Barnas said in a statement.
“By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.
The buyouts come on the heels of an estimated 500 layoffs last month. The company did not disclose what job sector or where the layoffs occurred.
The departure on Feb. 28 for “a relatively small number of global executives and classified employees” was described as immediate and based on performance in an internal memo sent to GM employees, according to the Detroit Free Press.
The automotive company closed out 2022 on a high note with revenue exceeding expectations at $156.7 billion and net income attributable to stockholders at $9.9 billion. The earnings before taxes hit a record $14.5 billion.
In Michigan, the automotive giant received $666.1 million in state grants and a $158 million tax incentive for four manufacturing sites in Orion Township and the Lansing area. The total project is estimated to be a $7 billion investment by GM into electric vehicles.
Despite these gains, GM CFO Paul Jacobson told stakeholders that the company planned to cut back $2 billion over the next two years during a Jan. 31 earnings call. At the time, Jacobson said layoffs would not be among cost saving measures.
“I want to be clear, we’re not planning layoffs,” he said. “We’re limiting our hiring to only the most strategically important roles and we will use attrition to help manage our overall headcount.”
Employees are “strongly encouraged” to take one of three packages GM is offering based on level and service at the company. Employees will have until March 24 to decide on the buyout. If they take the separation package they will depart June 30.
For employees with five or more years at GM the package includes one month pay for every year of service up to 12 months in addition to pro-rated performance bonus, healthcare and outplacement services.
Global executives taking the buyout are offered base salary and undisclosed incentives.