Published: Sat, November 03, 2018
Money | By Ralph Mccoy

GM offers buyouts to 18K workers after posting strong profit

GM offers buyouts to 18K workers after posting strong profit

The company made the offer to salaried workers with 12 or more years of service.

The company says that 40 percent of its 67,000 salaried full-time global workers have been hired in the past five years.

GM reported third-quarter net income of $2.53 billion, or $1.75 a share, compared with a loss previous year of $2.98 billion, or $2.03 a share.

"We are doing this while our company and economy are strong", the company said in an emailed statement.

The automaker says it is performing well, but the industry overall is facing slowing sales in the USA and China because of higher steel and aluminum prices due to American tariffs. In February, GM Korea offered employee buyouts before closing a plant in May.

Employees who are eligible for the buyout have until November 19 to decide.

"We had strong execution despite the challenges that we faced".

GM employees with 12 or more years at the company - about 18,000 of its 50,000 salaried staff in the United States - will be given the offer.

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GM reported that its Cruise Automation autonomous vehicle unit spent $263.19 million during the quarter and said spending likely will rise as the unit heads toward rolling out a self-driving ride-hailing service sometime in 2019.

The program is in addition to the company's previously announced plans to squeeze $6.5 billion in cost efficiencies from 2015 to 2018.

GM did not say if the buyouts would lead to layoffs if not enough people accept the severance.

"We will evaluate the need to implement after we see the results of the voluntary program and other cost-reduction efforts", the company said. Retired Chief Financial Officer Chuck Stevens talked about the possibility of cutbacks in the workforce last April.

Barra said on a conference call with analysts that demand remains strong in larger Chinese cities for the company's luxury vehicles, including GM's Cadillac models.

A year ago, GM posted a $3 billion net loss due to a $5.4 billion charge for selling Opel and Vauxhall to France's PSA Group.

Most of GM's salaried workers are in the USA, mainly in MI, at its Detroit headquarters, a huge technical center in suburban Warren, a testing center in nearby Milford, and an engine and transmission development center in Pontiac. The buyout program will affect about one-third of its workforce.

GM shares jumped more than 8 per cent to $36.34, their highest in nearly six weeks.

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