On Thursday, General Motors announced that it would offer most of its salaried workers a voluntary buyout opportunity that includes severance pay for up to 12 months.
The Detroit automaker’s staff reduction plan extends the “voluntary separation program” to all U.S. salaried employees with at least five years of service and all global executives with at least two years on the job.
Employees who opt for the program will be offered severance payments and other compensation, including “one month of pay for every year of service up to 12 months of pay, paid as a lump sum,” according to a GM memo.
The automaker is also providing compensation for health insurance coverage expenses and a pro-rated lump-sum bonus for the performance year.
The company memo stated, “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.”
Eligible employees will be offered “outplacement assistance” for three months to find another position. In addition, GM is allowing workers to keep their company vehicles until their final 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 added.
GM currently has roughly 58,000 salaried employees in the United States. Those who wish to volunteer for the buyout program have until March 24 to decide.
David Kudla, CEO of the investment advising firm Mainstay Capital Management, told the Detroit Free Press that GM’s offer is a “pretty good package.”
Sam Huszczo, a chartered financial analyst, noted that the program would create “a nice transition to the people who take it.”
“A rich offer like this is showing that they’re serious about that strategy,” Huszczo told the Detroit Free Press.
In January, GM CEO Mary Barra stated that the automaker is not planning any layoffs.
GM spokesperson David Barnas told the outlet that the buyout opportunity seeks to reduce structural costs as the company transitions to the electric vehicle market. The automaker plans to only manufacturer EVs by 2035.
“Employees are strongly encouraged to consider the program,” Barnas stated. “By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.”
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