GM buyout: Workers offered severance packages of up to 12 months
General Motors is offering buyouts to a majority of its salaried employees — some of whom could receive severance pay of up to 12 months.
The Detroit-based auto giant has given the company’s salaried employees until noon local time on March 24 to decide whether to accept the buyout that on the surface appears to be quite generous.
GM announced late last month that it would be slashing jobs and cutting some $2 billion in costs over the next two years.
Part of the cost-cutting strategy includes paring headcount by way of offering most salaried employees a voluntary buyout — the terms of which are being hailed as quite generous, according to the Detroit Free Press.
The newspaper obtained GM’s memo outlining the terms of its “voluntary separation program” which was offered to the company’s US-based salaried employees on Thursday.
“One month of pay for every year of service up to 12 months of pay, paid as a lump sum,” the memo read, detailing its severance package.
The company is also offering money for expenses linked to health insurance coverage.
“Employees enrolled in the company’s group medical plan will receive an additional lump sum payment that equals their monthly cost to continue group health benefits under COBRA, for every year of service up to 12 months,” according to the memo.
Salaried workers who accept the buyouts would also be entitled to keep bonus cash. The company is reportedly offering a pro-rated bonus for the 2023 performance year in the form of a lump-sum payment.
GM has also committed to offering employees who accept the buyout “outplacement assistance … for 3 months” to find another job, according to the memo cited by the Free Press.
The company will also allow employees to keep their company cars until their last day on the job.
“Most company vehicle drivers may retain the use of their company vehicle until their final day of employment or April 28, 2023 (whichever comes later), with some exceptions,” the memo read.
The employee would still be on the hook for all fuel expenses as well as maintenance costs once they are no longer on the company payroll.
David Kudla, CEO of Michigan-based investment advising firm Mainstay Capital Management, told the Free Press that the buyout offer was a “pretty good package.”
The Post has sought comment from GM.
A company spokesperson told the Free Press: “Employees are strongly encouraged to consider the program.”
“By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.”
Shares of GM fell by some 1.7% in early hours trading Friday.
GM has about 58,000 salaried workers in the US.
The company says the offers also are designed to avoid any possible firings at a later date.
CEO Mary Barra told analysts in January that GM wasn’t planning for any layoffs.
Offers will go to white-collar workers with at least five years of service, and global executives who have been with the company at least two years.
The decision to offer buyouts comes at an uncertain time for the auto industry, which is in the midst of a transition from internal combustion to electric vehicles.
GM has a goal of selling only electric passenger vehicles by 2035.
With Post wires
