- General Motors will offer voluntary buyouts to the “majority” of its U.S. white-collar workers, CEO Mary Parra said in a letter to workers Thursday.
- GM expects to take a pre-tax charge of up to $1.5 billion related to the acquisition, according to a public filing on Thursday.
- It comes after the Detroit automaker said last week it would cut about 500 payroll positions worldwide.
DETROIT – General Motors will offer voluntary buyouts to “the majority” of its 58,000 U.S. white-collar workers as it aims to cut $2 billion in structural costs over the next two years, according to a letter CEO Mary Barra sent to workers Thursday. .
The “Voluntary Severance Plan,” or VSP, is offered to all U.S. salaried employees who have spent five or more years with the company as of June 30. Outside the U.S., automakers offer buyouts to executives at least every two years. Time in the company.
GM expects to take a pre-tax charge of up to $1.5 billion related to the acquisitions. Public filing Thursday. Most payments are expected to be all cash and will occur in the first half of the year, the company said.
Barra, in Thursday’s letter, said it was “designed to accelerate depreciation in the U.S.” to help the company avoid “arbitrary actions” in the future. The buyout offer comes after the Detroit automaker said last week it would cut about 500 payroll positions worldwide.
The last time GM offered such a large buyout program to salaried employees was in 2019.
“Employees are strongly encouraged to consider the plan,” GM said in a statement emailed to CNBC Thursday. “By permanently reducing built-in costs, we can improve vehicle profitability and stay nimble in an increasingly competitive market.”
GM announced a $2 billion cost-cutting plan in January, saying savings of 30% to 50% are expected by 2023. At the time, executives said they planned to reduce headcount through layoffs rather than layoffs.
GM CEO Mary Barra speaks to the media before the start of the 2017 General Motors Company Annual Meeting of Shareholders at GM Global Headquarters in Detroit, Michigan, Tuesday, June 6, 2017.
John F. for GM. Martin’s photo
American employees authorized to purchase will receive one month’s pay and COBRA health coverage for each year they have worked for up to 12 months. They will also get team performance bonus and outplacement services. Global employees will get basic salary, incentives, COBRA and expatriate benefits.
Eligible employees interested in the scheme should register by March 24. Those selected and approved for the volunteer batch will depart by June 30.
A company spokeswoman declined to disclose how many employees the company is targeting to accept buyout packages. At the end of last year, GM employed about 81,000 salaried employees worldwide, according to a public filing.