As part of the cost cutting exercise, GM, the biggest automaker in the United States, has stopped work on 2 renovation projects and has also offered severance pay to 18,000 of its 50,000 salaried workers across North America.
According to a report by Automotive News, General Motors Co is slated to stop work on two renovation projects at its Detroit facilities. The move, part of a cost cutting exercise, also includes General Motors offering voluntary severance packages to 18,000 salaried workers across North America.
In an e-mail to salaried workers, Mary Barra, GM’s chief executive said, General Motors has “decided to postpone the new studio building of the Design Center and stop the Pontiac Propulsion workplace transformation”.
GM’s spokesman declined to comment on the cost savings exercise.
GM’s “structural costs are not aligned with the market realities nor the transformational priorities ahead. We must take significant actions now to address this while our company and the economy are strong,” said Barra.
GM, the largest automaker in the United States, has offered six months of severance pay to 18,000 of its 50,000 salaried workers in North America who have 12 or more years’ experience.
Employees have until November 19 to decide if they opt for the severance pay.
“We need to get ahead of headwinds, rather than let them happen to us. And we need to do all of that against a backdrop where those outside our company are skeptical of our ability to manage through an eventual downturn in the economy – skepticism we see in our stock price, which has recently been trading below our initial public offering price,” said Barra.
In what could be an allusion to the growing rift rift between the U.S. and China, Barra said having a strong cash position helps with external factors like “trade, market uncertainty and foreign exchange. Without a strong cash position, we cannot be the agile, innovative industry leader we need to be.”