Thousands of white collar jobs go in cuts
Auto prices boomed through the panademic, and chip shortages added to the supply bottleneck. Recent data from the Bureau of Labor Statistics indicates that vehicle transaction prices, which refer to the actual price paid after any dealer discounts or markups, have been increasing at a faster and higher rate since 2020 than at any other time in over 35 years. But now yet another manufacturer appears to be preparing for leaner times.
General Motors (GM) has announced that around 5,000 of its white-collar workers have opted for the automaker's buyout offers, averting any immediate need for layoffs. GM expects to save approximately $1 billion annually in costs due to the buyouts, which is half of its $2 billion target to be cut by the end of 2024.
The company's statement says that it is satisfied with the response to its buyout offers, as the move will enable it to “maintain momentum, agility, and competitiveness.” This step is viewed as part of the firm's ongoing efforts to streamline operations and reduce expenses amid the significant changes taking place in the automotive industry, particularly the shift towards electric and autonomous vehicles.
“Given the results of the program, companywide involuntary separations are not a consideration at this point,” said the GM’s statement.
According to a GM spokesperson, the majority of employees who participated in the buyout program are expected to leave by the end of June. Last month, GM CEO Mary Barra warned that involuntary actions would be required if not enough workers participated in the program. The buyouts were offered to the majority of GM's 58,000 white-collar employees in the United States, with a requirement that salaried employees have five years of experience with the company as of June 30 of this year, and executive-level employees have two years of experience.
The other members of the Big Three have already confirmed layoffs recently.
Ford Motor Co. disclosed last month that it will be reducing its workforce by approximately 1,100 employees at its Valencia plant located in eastern Spain. The announcement comes after the automaker previously revealed that it would be laying off 2,300 workers primarily in Germany and the United Kingdom as part of its efforts to create a "leaner, more competitive cost structure in Europe."
Stellantis, formerly known as Fiat Chrysler, idled a Jeep plant in Illinois last month in an effort to reduce costs as it focuses on investing in electric vehicles. The company stated that the plant will halt production and that its over 1,200 workers, who currently produce Jeep Cherokee SUVs, will be placed on indefinite layoffs. Stellantis cited the electrification of the automotive market as the main challenge that the industry is facing, causing a significant increase in related costs, along with the ongoing COVID-19 pandemic and the global microchip shortage, which have also affected the industry.
Even Lucid, the electric vehicle (EV) startup that produces the Air sedan as a competitor to the Tesla Model S, plans to lay off approximately 1,300 employees, representing 18% of its workforce, over the next several months. CEO Peter Rawlinson sent an email, which was appended to a regulatory filing, indicating that the workforce reductions would impact staff and contractors "in nearly every organization and level, including executives."