GM offers buyouts to 18K salaried workers in North America

GM Offers Buyouts to 18,000 Workers, Months After Warning About Layoffs Over Trump's Tariffs

GM Offers Buyouts to 18,000 Workers, Months After Warning About Layoffs Over Trump's Tariffs

General Motors Co said on Wednesday it plans to cut its North American salaried workforce, starting with voluntary buyout offers but resorting to layoffs if necessary. The company says in a prepared statement that although it is performing well, it wants to continue to reduce costs while the company and the economy are strong.

GM shares jumped almost 7 percent in early trading Wednesday to $35.76.

The strong profit from GM's China joint venture came even with a budding tariff war with the USA and uncertainty over sales in the world's largest auto market. The company has about 50,000 salaried workers in the U.S., Canada and Mexico.

Revenue jumped 6.4 per cent to $47.11 billion, also topping forecasts.

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The company has a cost-saving target for the move but has not disclosed that target nor what it is offering employees who decide to opt for the buyout package. GM CFO Dhivya Suryadevara said the company will achieve that goal. The Detroit automaker put up a record income of $500 million from July through September in China despite declining sales and rising trade tensions. GM reached $6.3 billion in cost-saving measures by the end of the third quarter, she said.

Suryadevara said the cost cutting measures have been a "big part" of the company's healthy profit margins - 8.8 percent globally, including 10.2 percent in North America, in the third quarter. But sales to dealers, the point at which GM books revenue, rose 4.5 per cent, to 1.13 million. The company posted a $440 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.

GM reported that its Cruise Automation autonomous vehicle unit spent $263.19 million during the quarter and said spending likely will rise as the unit heads toward rolling out a self-driving ride-hailing service sometime in 2019.

GM has long talked about reducing costs in preparation for an economic downturn.

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