General Motors announced on Wednesday that it has offered voluntary buyout packages to thousands of salaried workers in North America in an effort to cut costs amid tariff and market pressures, despite reporting quarterly results that handily beat analysts’ estimates.
Shares jumped 9 percent the biggest percentage gain since May of this year. However YTD the stock has lost about 18 percent.
|GM||GENERAL MOTORS CO.||49.17||-0.63||-1.27%|
In addition, GM announced it is halting work on two renovation projects at facilities in the Detroit area as it offers voluntary severance packages.
GM chief executive Mary Barra told salaried workers in an email Wednesday seen by Reuters that the automaker has “decided to postpone the new studio building of the Design Center and stop the Pontiac Propulsion workplace transformation”.
Automotive News reported Thursday the projects were expected to cost hundreds of millions of dollars. A GM spokesman declined to say what the cost savings or when GM may decide to resume the renovation projects.
Eighteen thousand of GM’s roughly 50,000 North American salaried workers, or 36%, have been with the company for at least 12 years and are eligible for the buyout.
They were sent offers Wednesday morning and have until Nov. 19 to decide, a company spokesman told Reuters.
“We are doing this while our company and economy are strong,” the company said in a statement.
According to the spokesman, if there are not enough employees forthcoming to take the buyouts, then layoffs are a possibility.
GM said strong sales of full-size trucks and crossover vehicles in the third quarter boosted profit and revenue for the period.
The company earned $1.87 per share on revenue of $35.79 billion. Analysts polled by Refinitiv expected the company to earn $1.25 per share on revenue of $34.85 billion.
This story has been updated.
View more information: https://www.foxbusiness.com/economy/general-motors-offers-employee-buyouts