GM offers buyouts to 18,000 salaried employees in North America

DETROIT -- General Motors is offering voluntary buyouts to roughly 18,000 salaried employees in North America who have 12 years or more experience.

The company, after inquiries about the offer, confirmed the plans as "proactive" measures to address future headwinds that GM expects as it invests in autonomous and electrified vehicles and as auto sales in North America and China — its largest markets — slow.

"We are doing this while our company and economy are strong," the company said in an emailed statement. "The voluntary severance program for eligible salaried employees is one example of our efforts to improve cost efficiency."

A notification was sent regarding the voluntary severance program to employees Wednesday morning, as the automaker reported a 25 percent increase in pretax profit in the third quarter and net income of $2.5 billion.

If GM determines that there are not enough volunteers for the buyout, the company could terminate employees. GM declined to disclose the number of people it wants to take the buyout offer or the buyout program's expected cost.

"We will evaluate the need to implement after we see the results of the voluntary program and other cost reduction efforts," GM said.

Eligible employees — roughly 36 percent of its 50,000 North American salaried workforce — have until Nov. 19 to make a decision regarding the program.

Buyouts are not uncommon in the auto industry. However, they typically occur when a company is restructuring or going through a decline. They also are typically offered for those close to retirement.

The buyout offer comes as Ford Motor Co. is undertaking an $11 billion restructuring that includes reducing its global salaried workforce of 70,000 under CEO Jim Hackett.

GM has a global salaried workforce of 77,000 people, according to its 2017 annual filing. That's down from 90,000 a year earlier, before GM sold its European operations to PSA Group.

The program is in addition to the company’s previously announced plans to squeeze $6.5 billion in cost efficiencies from 2015 to 2018. GM CFO Dhivya Suryadevara said the company will achieve that goal. GM reached $6.3 billion in cost-saving measures by the end of the third quarter, she said.

“We are focused on cost and will continue to do more,” she said Wednesday in response to a question from Automotive News about possibly reducing salaried employees.

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. Such efforts, she said, will continue after into next year and beyond: “We’re going to have an intense focus on cost and we’ll find more opportunities to take cost out of the system and maintain a low breakeven point.”