Car manufacturers are operating under a mandate to invest in autonomous and electrical. Understandably, with limited resources available, they must pull investments from somewhere so as to be able to put in money into autonomous/electrical. Towards the same, GM has decided to offer a severance package to as many as 18,000 employees.
These cost saving initiatives are being offered to contend with slowed sales in North America and China, and perhaps, to create a buffer that will allow GM to consider forward-looking initiatives such as autonomous and electric vehicles with much greater confidence. Towards the same, the company has also ditched various money-losing programs, such as the Opel brand in Europe.
The company is offering these voluntary buyouts to a subset of its salaried employees in North America. Each of these employees have at least 12 years of experience, and they will get until November 19 to decide. Folks that decide to take this buyout package will receive severance beginning February 1, 2019. Under the terms that the car manufacturer is offering, 36 percent of GM’s 50,000 employees in NA are eligible for the buyout, and the company expects as many as 18,000 to take it.
Meanwhile, the company has been on a 3-year cost-cutting spree. It is about to achieve its goal of saving $6.5 billion and is only about 200 million short. According to GM CFO Dhivya Suryadevara, the company will achieve its goal by the end of the year.
These savings are being reinvested in sectors like autonomous/electric vehicles. Some of these investments have included the acquisition of Cruise Automation for $1 billion in 2016, and a commitment to pour in $1.1 billion into its self-driving unit as part of a deal with SoftBank. It is also bearing down heavily upon getting more software engineers on-board, which again points towards the important role that autonomous has in GM’s future roadmap.
The company also plans to launch 20 new all-electric vehicles by 2023, and increase production of its Chevy Bolt.
