General Motors buyout 2018 – 7K employees to be terminated
October 31, 2018 saw an email go out to 50,000 salaried employees with an offer for a voluntary buyout to 17,700 employees. These employees meet the criteria of having being with the company for more than 12 years in the company.
General Motors buyout 2018
General Motors, the largest car maker by sales and market share is looking to lay off its middle level employees in January, 2019 if atlas 7,000 employees do nor register for the voluntary buyout. With an eye on the bottom line, to trim costs and hold prices of rising raw materials, October 31, 2018 saw an email go out to 50,000 salaried employees with an offer for a voluntary buyout to 17,700 employees. These employees meet the criteria of having being with the company for more than 12 years in the company.
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It was expected by industry analysts and GM that at least 7,000 employees would have taken the offer by November 19, 2018. However, the actual number accepting the buyout is said to be near to 4,000 – 3,000 lesser than expected. If the company does not hit this number by December, the company will start looking at involuntary lay-offs by mid- January, 2019.
The company managers last week took to having information sessions with employees to make them aware of their rights and benefits in this offer and to mitigate their fears on being fired.
However, industry analysts and external employee advisors say the involuntary buyout would be completed by November 29, 2018 and managers were already in the process of making involuntary layoff lists which could be announced as early as January 15, 2019.
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- General motors buyout 2018
- GM rumors 2018
The company will be also halting some renovation projects along with the job cuts in the two Michigan facilities.
7000 employees to loss jobs
Giving up one’s job has many considerations in a buyout such as – future of your role, proximity to your immediate boss, favorable terms with the management, personal finances of course along with future prospects. Also considering the importance of one’s role to the near profits of the company can secure your job.
American Auto Industry
The American auto industry has been losing traction. From selling 7.9 million units in 2014 to a staggering fall of 6.3 million in 2017, has rung the death knell for the profitability of the car segment. As per statista.com, the consumer demand moved to the light truck segment which has seen a rise from 8.7 million to 11.1 million during the same period. With the advancement of the prices in Brent Crude and subsequent gasoline prices, auto car sales have been on the decline. The nationwide average seasonal price has hovered around $3 per gallon. However, using the price elasticity model, a 10% increase in price renders a relative inelastic fall in demand – only up to 3-3.5% fall.
Michigan-based General Motors (GM), held around 17.6% of the light car and truck market in the United States in 2017. The holder of various brands such as – Cadillac, Chevrolet, GMC, Holden, Jiefang, OnStar, Wuling, Baojun and Buick also closed a deal with French auto maker PSA Group in 2017, to sell its Opel and Vauxhall brands. It has the highest number of brands available.
Ford motors is also expected to undertake a similar shakeup as part of its $11 billion “fitness” plan, though the level of employees or target layoffs have not been specified.
