As part of an effort to save billions of dollars in 2019, General Motors will continue layoffs of roughly 4,000 workers. Veuer’s Justin Kircher has the story.
General Motors confirmed that on Monday it began cutting some 4,000 salaried jobs, mostly in North America. A spokesman said the process will be concluded over the next two weeks.
GM leadership is communicating with employees on the timing and procedure of the job cuts, part of a restructuring intended to save $2.5 billion this year. The spokesman noted that some areas have already made cuts over the past couple of weeks.
“This will be implemented staff-by-staff and location-by-location over the next couple of weeks,” Pat Morrissey told the Free Press. “We’re not going to get into which departments and when and where it’s happening. Some staffs have already implemented this over the last few weeks, but there’s more of it this week and next week.”
Some employees inside GM’s Detroit headquarters received an email Monday morning from CFO Dhivya Suryadevara telling them “restructuring activities” were beginning and saying employees will be informed by their team leaders when the cuts are complete.
“As you hear about employees that are impacted, please be mindful and respect their feelings. People will respond differently, so always take your cue from them,” she wrote.
“Bear in mind that GM has adapted lessons from our past and we’ve thought about the individual throughout this transition. We want to preserve dignity to all employees by living our values and behaviors. We recognize that every individual will respond differently, and we will respect and acknowledge those differences.”
Some nonunion employees in manufacturing said they were notified by leadership, said an employee at GM’s Technical Center in Warren. This employee is familiar with the various departments at GM and said the engineering area had yet to be informed of its cuts.
General Motors announced plans to close three assembly plants, one each in Michigan, Ohio and Ontario before the end of 2019.
A line of cabs
An employee near GM’s Vehicle Engineering Center in Warren reported seeing a full line of cabs there waiting to transport any terminated employees who had to hand over keys to a company car.
The atmosphere inside GM at both its headquarters in the Renaissance Center in downtown Detroit and outlying GM offices in Warren or other regions was described as anxious by employees who have talked to the Free Press on the condition of anonymity.
Said one, “This cloud has hung overhead for months. I need it to go away so we can start functioning normally again.”
One of the memos obtained by the Free Press read: “Today we continue our restructuring activities, including employee separations, across North American locations. Please be assured that every effort has been made to treat our employees with the highest respect. We have thought through personal and professional needs and will provide our employees choices for how the process will work best for them.”
It goes on to say that, “We all manage stress and emotion differently, and safety is a key element of our culture. As you know from your GM safety training if you see or hear something that may impact employee safety, please speak up.”
An employee in GM’s IT area, who asked to not be identified for fear of job loss, said most of the workers in that area have six to eight years’ tenure and fear they will get very small severance packages. This employee said the eliminations were to start at 9:30 a.m. EST and run in 30-minute intervals until 6:30 this evening.
GM’s Morrissey said severance pay will be based on years of service. He said for those with 12 years or more, the severance package is the same as the one offered late last year to the 2,250 employees who took a voluntary buyout, which is six months’ pay and the continuation of health care benefits.
A new kind of worker
CEO Mary Barra says the company must restructure while its finances are good to be ready for changes in the industry. GM reports its 2018 full year and fourth-quarter earnings Wednesday. It reported adjusted pretax earnings of $9 billion over the first three quarters of the year.
The auto industry is changing, with high research and development costs for the anticipated need to capture big shares of the coming market for autonomous ride sharing and delivery of goods. Legacy automakers are seeking tech workers as they reshape, and Barra has said GM should be seen as a tech company.
GM has been on a hiring spurt for nearly five years as it seeks new skills for its drive to develop automated and more electrified vehicles. The Free Press reported in June that GM had hired 9,000 new people in the previous 24 months. Forty percent of GM’s 67,000 salaried full-time global workers had been hired in the last five years, the company said at the time.
The white-collar cuts are in addition to manufacturing reductions announced Nov. 26. That day, GM said it would idle five North American factories: Detroit-Hamtramck; Lordstown, Ohio; Oshawa, Ontario; Warren Transmission; and a transmission plant in the Baltimore area. In total, some 6,000 factory jobs are jeopardy.
U.S. and Canadian autoworkers are vigorously protesting those closures.
Since GM announced last fall that it would be eliminating about 8,000 white-collar jobs in North America, the company has been contacted by “dozens” of large companies over the past few weeks expressing interest in hiring people GM cuts, Morrissey said. As a result, it will be offering outplacement services for those effected to help them get another job.
“All employees who get cut will receive job placement services and access to companies that have expressed interest in our employees,” Morrissey said.
While it’s meant to soften the blow, experts caution GM employees who are cut to remember the “last-in-first-out” rule when contemplating moves that involve relocation to go to work for any other interested companies.
“For when the national recession arrives in the next two years, those hired last into those companies will be the first to be laid off again, and the relocated GM employees will have incurred significant cost and disruption to their lives to move,” said Jon Gabrielsen, economist and automaker consultant. “It is a horrible Catch-22. Stay in metro Detroit and perhaps not find a job or move and perhaps have the new job be short lived.”
Said Morrissey, “We are taking action now while the overall economy and job market are strong, increasing the ability of impacted employees to continue to advance in their careers, should they choose to do so. Our focus now is on working with each individual employee on providing severance packages and transition support through job placement services.
“Also, with the overall strong economy and job market, many Fortune 500 companies and other employers have reached out to us expressing interest in hiring our impacted team members. These companies are eager to begin the interview process and fill openings. We will be providing that information to our employees through the job placement services.”
Contact Jamie L. LaReau: 313-222-2149 or firstname.lastname@example.org
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