General Motors wants to send a clear message: The Detroit automaker is determined to fight in, and become a major player in, the electric-vehicle market, which is considered the future of cars.
In recent months, the Detroit giant has lagged behind Tesla (TSLA) and Ford and even EV upstarts like Rivian (RIVN).
Tesla launched a price war by drastically lowering the prices of its vehicles. Ford (F) responded by lowering prices on the Ford Mustang Mach-E SUV.
As for EV upstarts, they're making headlines for the wrong reasons: Investors are worried that they're burning a lot of money while dealing with a demand problem.
GM Offers Buyouts to U.S. Salaried Workers
General Motors, (GM) headed by Mary Barra, has broken its silence. It will concentrate its forces on the development of electric vehicles. And as part of that effort, the manufacturer of the Chevrolet Bolt EV/Bolt EUV wants to let go of as many white-collar workers as possible to drastically reduce costs.
GM offered buyouts to most of its U.S. salaried workforce and some global executives. The group wants to avoid layoffs, preferring voluntary departures. GM has some 58,000 salaried workers in the U.S.
The company wants to accelerate attrition to meet a goal of $2 billion in cost cuts by the end of next year.
"As part of our plan to accelerate attrition and achieve $2 billion in cost savings by the end of 2024, General Motors is announcing a voluntary separation program for all U.S. salaried employees with at least five years of service and all global executives with at least two years of service," a spokesperson said in an emailed statement.
"By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.”
In the U.S., offers are for white-collar workers. Employees who are interested in the buyout must sign up by March 24, 2023. Those who take it and are approved will leave the company by June 30.
U.S. salaried workers are being offered one month's pay for every year of service, up to 12 months. They’ll also be offered Cobra health care and part of the bonuses they would receive this year.
Offering More Electric Models
GM wants to reduce discretionary spending and focus investment in EVs to quickly reap benefits, the company said.
The move comes when most legacy carmakers are accelerating the transition from gas cars to battery-powered vehicles. BEVs and EVs require a lot of investment in research and development, the modernization of factories, and new skills. Car manufacturers must also invest massively to acquire the raw materials -- cobalt, nickel, lithium -- necessary to develop batteries.
GM has an ambitious goal of selling only electric passenger vehicles by 2035. In 2022, General Motors delivered 39,096 all-electric vehicles in the U.S., up 57% year over year. In total, the company sold 2.27 million vehicles in the U.S. last year.
By 2025, GM wants to increase its sales of BEV in North America to 1 million annually (about 250,000 per quarter). To do this, the automaker will expand its offerings and ramp up production.
Currently, GM produces three electric passenger vehicles: the Cadillac Lyriq, the Chevrolet Bolt EV/EUV and the GMC Hummer EV pickup truck. It also manufactures the BrightDrop all-electric van.
In the coming years, this lineup will grow with the Chevrolet Blazer EV (summer 2023), the Chevrolet Equinox EV (fall 2023), the Chevrolet Silverado EV (spring 2023), the GMC Hummer EV SUV (mid-2023) and the BrightDrop Zevo 400 (launch in 2023).
