General Motors offers buyouts to 18,000 of 50,000 North American workers
General Motors followed up on a strong earnings report by offering company buyouts to tens of thousands of salaried workers, part of an ongoing cost-cutting effort by the automaker.
The exit packages are being offered to about 18,000 of the company's 50,000 white-collar employees in North America, who will have until Nov. 19 to raise their hands for the buyouts, GM sources told CBS News transportation correspondent Kris Van Cleave. The story was first reported by the Detroit News.
GM confirmed in an email that it was offering a "voluntary severance program" to eligible salaried workers in the U.S. and Canada with 12 or more years of experience as part of a company-wide cost-cutting initiative. GM has said it is aiming to save $6.5 billion in "cost efficiencies" through 2018. Terms of the buyouts weren't released.
In an earnings call with analysts on Wednesday, GM CEO Mary Barra indirectly alluded to the severance offers to nearly 40% of salaried workers. GM, she said, is "taking steps to transform the workforce to ensure we have the right skill sets for today and the future while also driving significant efficiency."
News of the worker buyouts comes after GM reported strong third-quarter earnings on Wednesday showing an operating profit of $2.5 billion for the three months ended Sept. 30 and a healthy 10.2 percent profit margin for its North America region.
"The voluntary severance program for eligible salaried employees is one example of our efforts to improve cost efficiency," GM stated in an email.
"We've been on a journey to transform the company, both in how we operate the business and in how we lead in the future of mobility," the email explained. "Even with the positive progress we've made, we are taking proactive steps to get ahead of the curve by accelerating our efforts to address overall business performance. We are doing this while our company and economy are strong."
GM in recent years has worked at slicing costs, with a goal of $6.5 billion in cuts this year alone. The company has scaled back production at its plants, with its hourly workforce down by 4,000 people in 2017, according to GM's annual report. The automaker in June ended the second shift at its factory in Lordstown, Ohio, cutting 1,500 workers.
The company's main competitor, Ford, said earlier this month that it would reduce its salaried workforce by the second quarter of 2019.
GM shares surged nearly 9 percent to $36.55, their highest since the end of August.