General Motors offers buyouts to get 'ahead of the curve'
With no end to steel tariffs in sight, the automaker is making plans for a downturn.
Even after consecutively reporting strong third-quarter financial results, General Motors Co. is offering buyouts to 18,000 salaried employees in North American to invest in new technology and brace for an economic downturn that may be caused by steel tariffs. The Detroit News reports:
The Detroit automaker notified employees of the voluntary severance program Wednesday, shortly after it released strong third-quarter financial results, with a 10.2-percent profit margin on earnings of $2.8 billion in North America alone last quarter.
"We are doing this while our company and economy are strong," GM said in a statement. "The voluntary severance program for eligible salaried employees is one example of our efforts to improve cost efficiency."
This summer, GM warned President Trump that steel tariffs could signal a loss of jobs and lower wages for American autoworkers. Although company earnings are strong right now, the plan is to "get ahead of the curve." The buyouts announced on Wednesday are optional, but GM says it has plans to "evaluate the need to implement" layoffs if it can't reach its cost-savings goal. The Detroit News reports:
The Detroit automaker has said it plans to save $6.5 billion in cost efficiencies through 2018, some $6.3 billion of which it has already achieved through the third quarter. Suryadevara said GM is on track to hit its efficiency goals by the end of the year.
The savings goal for the buyout program has not been released.