Great layoffs of the auto industry: General Motors ‘bribes’ 58,000 workers to quit their jobs to free the company to fight Elon Musk

On March 9, 2023, CEO Mary Barra of General Motors (GM) sent an email to the entire company, offering to pay a sum of money to 58,000 of its employees to let them quit on their own.

This shocking statement of GM comes in the context of the company wanting to abandon the traditional gasoline car industry to focus on making electric cars, competing with Elon Musk’s Tesla. This plan, if implemented, is expected to save GM about $2 billion in fixed costs over the next two years.

However, this move still angered employees when GM just released financial statements with a record profit of $ 14.5 billion for 2022. The traditional car group intends to spend money. billion USD in the next few years to switch to electric cars and other areas.

Similar to GM, Ford has also announced a shift in focus to electric vehicles and laid off thousands of employees in the fall of 2022. Ford Corporation said it has spent up to $ 20 billion to restructure the organization. organization for the production of electric cars, and spend another 30 billion USD to develop and research this segment.

Meanwhile, GM said it will spend up to $35 billion to turn electric vehicles into a profitable business by 2025.

Currently, GM’s redirection work is not very favorable when their luxury electric vehicle project is behind schedule. Then GM’s Hummer EV line of electric cars was also discontinued after detecting a leak of water into the battery.

Returning to the story of dismissal, Fox 2 News reported that GM’s move is to ensure that the restructuring does not face strong objections from employees when the company has compensated employees voluntarily. quit one’s job.

It is estimated that GM will cost about $1.5 billion in compensation and another $300 million in pensions for employees when it reshuffles the system.

GM employees will receive 1 month’s salary in advance, with medical expenses and insurance within 1 year if they voluntarily leave instead of being fired.

According to CNBC, the last time GM made a similar move was in 2018-2019 when the company had to close several factories and ask thousands of workers to quit through compensation. Avoiding layoffs not only saves GM from union lawsuits, worker protests and anger, and the associated troubles.

“By permanently reducing fixed costs, we can improve profitability and increase our competitive advantage in the marketplace,” CEO Barra said in an email to all employees.

*Source: The Verge