By ALEXANDER WILLIS
General Motors emailed 18,000 of its employees Wednesday morning, offering a buyout to those who have worked at the company for at least 12 years.
The buyout offer extended to employees came in spite of a newly reported profitable third-quarter that saw revenue increase by 6 percent compared to last year.
The reasoning for the offer, which General Motors called a “voluntary severance program,” was to “improve cost efficiency,” according to a statement put out by General Motors.
According to the Wall Street Journal, employees will have until November 19 to accept the offer.
Mike Herron, who has served as the chairman of the Spring Hill chapter of the Unified Automobile Workers of General Motors for 17 years, said these sorts of offers are not uncommon in the industry, but that in this particular case, it might be a symptom of recent advancements in transportation.
“Transportation is changing right in front of us, we’re seeing a huge push to electric, to hydrogen [and] to advanced propulsion systems,” Herron said. “So consequently, I think this is two things: it’s an opportunity to cut costs, while at the same time an opportunity to hire resources that are needed in the advanced sectors of the business.”
Additionally, Herron said he believes that the recent tariffs enacted by the Trump administration, particularly those on steel and aluminum, are also a likely cause of the buyout offer from General Motors.
“These tariffs are absolutely putting a bite on all of the automotive companies that are doing business in North America,” Herron said. “Additionally, we have electronic components that are purchased out of China, and those have gone up significantly. Some of the projections in terms of what the cost is to these companies… they’re in the billions.”
In March of this year, Trump imposed a 25 percent tariff on foreign steel, and a 10 percent tariff on foreign aluminum. While the tariffs have certainly helped the American steel and aluminum industries, the auto industry took a strong hit, with more employee buyouts from auto manufacturers potentially on the horizon.
General Motors employs roughly 50,000 salaried workers in the United States, meaning the company has extended the buyout offer to roughly 36 percent of its salaried employees in the country.
The specifics of the terms of the buyout are currently unknown, but similar buyouts often include anything from a lump sum severance package, to a monthly payout based on previous wages.