GM offers buyouts to ‘majority’ of U.S. salaried workers
GM CEO Mary Barra talks with media prior to the start of the 2017 General Motors Company Annual Meeting of Stockholders Tuesday, June 6, 2017 at GM Global Headquarters in Detroit, Michigan.
Photo by John F. Martin for GM
DETROIT – General Motors will offer voluntary buyouts to a “majority” of its U.S. white-collar employees, as it aims to cut $2 billion in structural costs over the next two years, according to a letter sent to workers Thursday from CEO Mary Barra.
The “Voluntary Separation Program,” or VSP, will be offered to all U.S. salaried employees who have spent five or more years at the company as of June 30. Outside of the U.S., the automaker also is offering buyouts to executives with at least two years of time or more.
GM expects to take a pre-tax charge of up to $1.5 billion related to the buyouts, according to a public filing Thursday by the company. It comes after the Detroit automaker said last week it would terminate about 500 salaried positions globally.
Bara, in the letter Thursday, said the program is “designed to accelerate attrition in the U.S.,” assisting the company in potentially avoiding “involuntary actions” in the future.
“Employees are strongly encouraged to consider the program,” GM said in an emailed statement to CNBC Thursday. “By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.”
At the end of last year, GM employed about 81,000 salaried employees worldwide, according to public filings.
U.S. employees who are approved will be granted one month pay for every year they worked up to 12 months, as well as COBRA health coverage. They also will receive prorated team performance bonuses and outplacement services. Global employees will receive base salary, incentives, COBRA and outplacement services.
Eligible employees interested in the program must sign up by March 24. Those who elect to take a voluntary package and are approved will depart by June 30.
A company spokeswoman declined to disclose how many employees the company is targeting to accept the buyout packages.
This is developing news. Please check back for additional information.