GM sounds the alarm, in advance

"To achieve what this company is truly capable of — and to win — we need to be even more agile and faster to market," GM CEO Mary Barra wrote in an email to employees last week addressing the buyouts and cost cuts. "We need to get ahead of headwinds, rather than let them happen to us."

The headwinds, Barra and Wall Street analysts note, already are swirling. GM's global sales are weakening, especially in China and the U.S., the company's remaining strongholds.

In her message, obtained by Automotive News, Barra detailed internal and external factors, such as trade policy and global economic conditions, that the company cannot control but must be prepared to address.

She said the company needs to increase free cash flow by cutting structural costs and nonessential investments, such as building renovations that were expected to cost hundreds of millions of dollars.

Third-quarter results back up Murphy's assessment. While Ford experienced a 37 percent drop in earnings due to poor results in China and other markets, GM significantly outperformed Wall Street's expectations on strong profits in China and North America, despite lower sales.

As Ford pushed back its target of 8 percent global profit margins — currently at 4.4 percent — by 2020, GM reported an 8.8 percent margin for the third quarter.

GM's cost cutting isn't over.

"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 break-even point," CFO Dhivya Suryadevara said last week.

She said GM will achieve its previously announced goal of realizing $6.5 billion in cost efficiencies from 2015 to 2018. Additional goals or cost-cutting measures could come when the company announces its guidance for 2019, she said. Those measures could include layoffs of salaried employees if not enough workers take the buyouts.

The buyouts will be available to roughly 18,000 salaried employees in North America and "most" global executives who have 12 years or more of experience. They have until Nov. 19 to make a decision.

GM's willingness to cut costs at headquarters could help the company make a more convincing case for trimming production capacity when it negotiates new contracts with the UAW next year.

GM's capacity utilization rates in the U.S. are the lowest of all automakers. Of its 12 U.S. assembly plants, five are operating on three shifts; three are on two shifts; and four are on a single shift.