Compile the | Ding Huize
Edit | Jiang Peng
Source | associated press
Report from Bangning Studios (gbngzs).
Detroit is planning a frenzied wave of layoffs.
On October 31, 2018, bad, the same bad news passed from Ford's "Glass Building" to GM's revival center, which stands on the banks of the Erie River.
Following Ford's announcement or layoffs, a wide-ranging employee buyout is brewing inside GM.
On Wednesday (October 31), GM issued a new announcement that about 18,000 white-collar workers in the North American market will be bought out, and even employees who have served GM for 12 years or more, the Associated Press said.
Most of GM's salaried employees are in the United States, mainly in Michigan— detroit headquarters, a huge technology center in the suburbs of Warren, a test center near Milford, and Pontiac's engine and transmission development center.
The widespread buyout means that 36 percent of North American employees will leave GM.
It looks like no warning. In fact, buyouts are not uncommon in the automotive industry. However, they often happen when companies restructure or experience recessions and are used for employees who are close to retirement. On the same day, GM also announced that in the third quarter, its profits rose by 40% to $2.5 billion.
But GM said in a prepared statement that while the results are good, it still hopes to continue to reduce costs while the company and the economy are strong.
"Even as we make progress, we still need to take proactive steps, pick up the pace and continue to work hard to improve our overall business performance. Offering voluntary separation schemes to eligible salaried employees at a time when the company and the economy are in good shape is an example of how we can improve our cost-effectiveness. GM said.
This seems to be the same starting point as Ford.
Just in mid-October 2018, Ford Motor Company said it would achieve an $11 billion restructuring plan to improve corporate profitability and competitiveness, including a global plan to lay off up to 70,000 people.
GM has a long history of reducing costs and increasing profits.
Since Mary Barra became chairman and CEO of General Motors in 2014, she has been steadfast in her push to reduce costs and boost profits.
"We will be fully committed to further enhancing profitability, enhancing business performance and seizing long-term growth opportunities." We will optimize the operating model according to the characteristics of each regional market to improve product and cost competitiveness. ”
In the future, according to GM's plan, they will continue to enhance profitability by selling high-margin trucks and SUVs, while investing in new technologies such as electric or self-driving cars.
The company previously announced plans to reduce structural costs by $6.5 billion annually between 2015 and 2018. Suryadevara, GM's chief financial officer, said the plan would materialize by the end of the year.
"GM achieved $6.3 billion in cost reductions at the end of the third quarter." Suyadwala revealed that cost-cutting measures are the "backbone" of the company's healthy margins — namely a global margin of 8.8 percent in the third quarter, including a 10.2 percent margin in North America.
These measures will continue next year and beyond. "We will pay close attention to costs, and we will find more opportunities to cut costs from within the company and maintain a low break-even point."
For internal layoffs, retired GM chief financial officer Chuck Stevens hinted at it in April 2017.
He told analysts that GM is looking for appropriate reduction measures because it has simplified its business after leaving Europe.
"The simplification of the business allows us to spin off important structures from the company, whether they are employees or engineers." He said at a earnings conference.
In March last year, GM sold Opel and Vauxhall to france's PSA Group, which also directly reduced GM's global salaried employees from 90,000 to 77,000 at the end of 2017.
Importantly, layoffs reduce costs and strengthen profitability — which may be related to GM's failure to meet expectations in the global market.
At a time when global markets are really changing dramatically, the auto industry is facing looming problems such as slowing sales in the U.S. and China and rising steel and aluminum prices due to U.S. tariffs.
The problem is that after strategically opting out of the European market and launching the Chevrolet brand in South Africa, China and the U.S. market have become the two major centers of GM.
"Driven by rapidly growing consumer demand, China has been GM's largest market in the world for many years. We will continue to focus our strategy on segments with strong demand and high growth potential, which has been a key factor in our success. Qian Huikang, global executive vice president of GM and president of GM China, has said.
To this end, GM has announced a new development plan - from 2014 to 2018 in China to invest 14 billion US dollars to expand, and will launch more than 60 new and modified models in China, helping SAIC-GM to occupy 10% of the market share in 2020.
But in 2018, the Chinese market changed. SAIC-GM's growth has not been significant, and the core Buick brand has even suffered negative growth, while both the Chevrolet brand and the Cadillac brand have suffered from sharp price cuts at the terminal.
With the start of the Sino-US trade war, GM's development in China has added a layer of shadow.
GM further said it would not disclose the buyout clause for the time being.
Patrick Morrissey, a spokesman for GM, would not say whether the buyout would go well. He said employees who received buyout notices would make a decision on Nov. 19 and leave the company before the end of the year.
Morrissey did not say whether GM would simply lay off employees if there were too few employees who voluntarily bought out. But he commented: "We will assess the need for implementation after seeing the effectiveness of the voluntary separation program and other cost-cutting measures." ”
General Motors shares rose about 7 percent after the third-quarter earnings report on Wednesday morning. After the buyout news came to light, shares of GM, which had been down since June, rose nearly 10 percent to $36.73.
But GM employees who appeared on the 18,000-member buyout list were apparently not happy.
It is worth thinking that under the difficult adjustment period of Ford Motor Company and the limited development of General Motors in the Chinese market, will they become a cold winter in Detroit when they have successively blown up this round of layoffs?
This is not good news after all.
(Some of the pictures in the article are from the Internet)