New Report Talks GM Buyouts, Possible Layoffs

General Motors is going through buyouts and possible layoffs as it cuts costs and tries to increase margins. But that could be a test of company culture too, according to a report from The Detroit News.

The General offered six months pay and healthcare starting in February to salaried employees and execs with 12 or more years with the company. That might not seem much for that level of tenure, but it’s the company’s maximum severance package.

The deadline to take it was Monday, but the company isn’t saying how many staffers took them up on the offer. The Detroit News says that’s because department bosses still have to decide if the buyouts are enough to let them meet the cost-cut goals.

Harley Shaiken, a labor issues professor at the University of California Berkley talked to the publication about the effect on staff. “This is a really tough challenge and there are no easy answers. The value of morale in a company that is increasingly a player in a high-tech universe is critical. This isn’t simply a money-saving decision, it’s about what’s GM’s culture going forward.”

People understand economic realities even when they are painful. The best thing a company can do is be transparent about these decisions and why they are making them,” Shaiken said.

The report says that since this is the max buyout the company offers, should layoffs replace buyouts, the payouts would likely stay the same. Though they could be much less and affect a wider range of employees.

With the rise of electric and autonomous vehicles pending, GM is planning to spend $1 billion on Cruise Automation. With half of that on staff for that division, GM CEO Mary Barra said during the third-quarter earnings call. It needs to trim costs in other areas to help pay for the new R&D costs.

[source: The Detroit News]