General Motors Officially Announces Plan to Layoff Workers
The layoff of Salaried Workers
Reports have it that General Motors currently has a plan to layoff not less than 4,000 of its North America salaried workers. According to sources, the layoff is expected to start on Monday, and that’s coming ahead of General Motor’s earnings reports for the fourth quarter.
This reduction comes as the company which is heralded as the largest American automaker goes through with a major restructuring. It will be recalled that the restructuring was earlier announced in November 2018 by Mary Barra, the chief executive officer of the company.
Sources report that General Motors is putting a stop to production at its five plants located in North America. In addition to that, it is planning to cut 14,000 jobs in a bid to realign its workforce as well as its plants for the production of an increased number of electric cars.
Inside sources made it known that the executives of the company intend to finalize as many layoffs as they can before the release of its earnings reports on Wednesday. According to a spokesperson of the company, Pat Morrissey, they are putting the confirmation of the timing on hold.
Morrissey added that they place priority on their employees and they intend to communicate with the employees first before making the public disclosure. It now appears that these layoffs are not as steep as compared with previous conceptions.
Previous Buy-Out Offers
According to the content of a document released last year November, General Motors offered buy-outs to about 17,700 of its workers in North America who have not less than twelve years of service.
The company prior to the time confirmed that its aim was 8,000 voluntary buyouts. Sometime in November, reports made it known that about 2,250 employees already accepted the severance agreements as confirmed by the company. An inside source confirmed that approximately 1,500 contract jobs since that time had been eliminated.
In essence, about 4,250 salaried employees and 6,000 employees paid by the hour are left as the targets of the proposed layoff. In November, the company made it known that half of those hourly employees was in Canada while the other half was in the United States.
Sources report that the company already offered alternative jobs to the entire 2,800 hourly workers that were affected in America and roughly 1,000 of these employees already accepted. Those 3,000 hourly employees in Canada are also getting one form of help or the other with training and getting new jobs.
Location Target Of Layoffs
It appears that the majority of the planned layoffs are targeted at the factories in Canada and the U.S. making compact cars and sedans. Statistics show that the sale of these cars in those locations has not been impressive.
That is because a lot of customers have turned towards sport utility vehicles, crossovers, and trucks. The vehicles have the tendency of providing more profits for the automakers. With its move to trim back its sedan lineup while also existing the businesses that are the least lucrative, the company has continued to pump cash into the recent mobility technologies, particularly autonomous driving.
Effects Of Reorganization
According to the company, the reorganization is expected to help it save roughly $6 billion come 2020 and half of the savings would be realized before the end of this year. The executives of the company informed investors in the middle of January that the full year results of the company for 2018 outperformed their expectations. That also provided a positive outlook for the current year.
According to SGH Wealth Management’s owner, Sam Huszczo, the CEO of General Motors, Mary Barra is very bold, and she does not mind making decisions people would ordinarily consider tough. Huszczo who mentioned that he is the wealth manager to a lot of people working with General Motors added that it was a nice strength on her part considering what the company has been through historically.
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