GM offers buyouts to 18,000 salaried workers, says layoffs possible

[313WX]

"General Motors is offering voluntary buyouts to salaried workers in North America, acknowledging Wednesday that if it does not get enough takers, it may consider layoffs early next year.

Shortly after reporting better-than-expected third-quarter earnings, CEO Mary Barra sent an email to all 50,000 salaried GM employees in North America at about 8:30 a.m."
https://www.freep.com/story/money/ca...rs/1831530002/

[Cincinnati_Kid]

The industry is experiencing a downturn, as sales have dropped for the Big 3. Probably related to Trump's tariffs. Knew it would happen eventually, "What goes up, must come down"

[sirrealone]

Many people will probably gladly take it as I'm sure they'll have no problems finding another job. Unfortunately, as history shows, a lot of those jobs will likely be in another state.

To me this is a signal that the current uptrend in Michigan's economic cycle has peaked.

[Honky Tonk]

It's all because of those scooters.

[Worldsgreatest]

The industry is experiencing a downturn, as sales have dropped for the Big 3. Probably related to Trump's tariffs. Knew it would happen eventually, "What goes up, must come down"

Earnings were over 40% higher than analysts estimated. Far from a "downturn".

[Bham1982]

I REALLY hope the people with middle class salaries I see buying boats, 60k cars and 10k cruises are socking lots of money away.

The next recession is gonna be a doozy. It's like everyone in the industry forgot what happened 10 years ago. Unless you're a doctor or in some recession-proof occupation you're an idiot if you aren't putting money away for bad times.

[Pat001]

Even a generous voluntary separation package isn't like winning the lottery - you get pay and benefits for a few months, and that will go by quickly. Few if any of those affected GM salaried employees in their 40s-50s are in a position to retire. They have mortgages, car payments and other expenses, a kid or two in college, plus the prospect of elderly parents to care for. And if they don’t take the “voluntary” package we all know what comes next...

[Worldsgreatest]

I REALLY hope the people with middle class salaries I see buying boats, 60k cars and 10k cruises are socking lots of money away.

The next recession is gonna be a doozy. It's like everyone in the industry forgot what happened 10 years ago. Unless you're a doctor or in some recession-proof occupation you're an idiot if you aren't putting money away for bad times.

I'm sure the thought of recession gets you all excited in your panties but these buyouts having nothing to do with it. Nobody starts firing preemptively over the thought of a coming recession, that makes zero business sense. GM is putting resources aside and transitioning work for automated cars and electric vehicles, also likely an acquisition.

[aj3647]

Earnings were over 40% higher than analysts estimated. Far from a "downturn".

That earnings beat estimates mean nothing if the estimate expectations are low, now does it?

https://www.macrotrends.net/stocks/c...motors/revenue

• General Motors revenue for the twelve months ending June 30, 2018 was $144.197B, a 3.08% decline year-over-year.

[Bham1982]

I'm sure the thought of recession gets you all excited in your panties but these buyouts having nothing to do with it. Nobody starts firing preemptively over the thought of a coming recession, that makes zero business sense. GM is putting resources aside and transitioning work for automated cars and electric vehicles, also likely an acquisition.

Nothing you wrote makes any sense. Buyouts have nothing to do with projected profitability? Layoffs have nothing to do with economic downturns? All absurd nonsense.

Are you a GM employee/retiree or just a shareholder/cheerleader? Back here in the real world, the Big 3 face declining earnings and retrenchment.

[hybridy]

That earnings beat estimates mean nothing if the estimate expectations are low, now does it?

https://www.macrotrends.net/stocks/c...motors/revenue

• General Motors revenue for the twelve months ending June 30, 2018 was $144.197B, a 3.08% decline year-over-year.

never underestimate the power of denial, but things are slowing

U.S. GDP growth will rise to 3.1 percent in 2018, 2.5 percent in 2019, and 2.0 percent in 2020. That's according to the most recent forecast released at the Federal Open Market Committee meeting on September 26, 2018. This estimate takes into account Trump's economic policies.

The unemployment rate will drop to 3.7 percent in 2018, and 3.5 percent in 2019 and 2020. That's lower than the Fed's 6.7 percent target. But former Federal Reserve Chair Janet Yellen admitted a lot of workers are part-time and would prefer full-time work. Also, most job growth is in low-paying retail and food service industries. Some people have been out of work for so long that they'll never be able to return to the high-paying jobs they used to have. Structural unemployment has increased. These traits are unique to this recovery.

Yellen admitted that the real unemployment rate is more accurate. It's double the widely-reported rate.

[Johnnny5]

I'm sure the thought of recession gets you all excited in your panties but these buyouts having nothing to do with it. Nobody starts firing preemptively over the thought of a coming recession, that makes zero business sense. GM is putting resources aside and transitioning work for automated cars and electric vehicles, also likely an acquisition.

I have to disagree.

With rising rates, growing trade wars, increased vehicle longevity, an aging U.S population and a younger generation with less interest in autos, a slowdown in the auto sector is all but inevitable. And from what I am seeing it appears as if G.M and Ford are both preemptively downsizing in anticipation of such. Yes, they may be pushing resources into development of new technologies, but if they were not expecting a major slowdown they would simply do both [[Expand advanced development and maintain their current operations).

We may not be headed for a full blown recession, but the automotive sector is likely to feel it more than most as we've been riding higher than most since the Great Recession. It's probably a good thing that they appear to be making cuts gradually this time instead of being totally caught off guard as they were prior to the Great Recession. [[Ford not totally, as they did manage to acquire massive lines of credit just before the last slow down and credit crunch).

[313WX]

An interesting fact someone mentioned yesterday:

The first term of every presidency since Teddy Roosevelt has featured a recession.

It'll be interesting to see if we break that trend with Trump. An argument can be made both for and against it.

[Cincinnati_Kid]

Earnings were over 40% higher than analysts estimated. Far from a "downturn".

I saw a auto analyst on the news say that earnings are down, and profit sharing checks for employees are going to be a lot smaller next year. "Don't Shoot The Messenger"

[Worldsgreatest]

Nothing you wrote makes any sense. Buyouts have nothing to do with projected profitability? Layoffs have nothing to do with economic downturns? All absurd nonsense.

Are you a GM employee/retiree or just a shareholder/cheerleader? Back here in the real world, the Big 3 face declining earnings and retrenchment.

Those things are not at all what I said, re-read and come back with an intelligible response and maybe I'll reply.

[Worldsgreatest]

These are revenues coming off of the highest record profits in half a century, slight declines are not indicative of serious "downturns" that's just Detroityes alarmist rhetoric, none of you can predict when such things will happen/hit so you can talk about it till you're blue in the face it doesn't matter. And where do you get the idea that these are "low" standards? If revenues are still up dramatically from predictions that means things are going much better than planned. GM is restructuring workers for future projects/needs, ford did the same thing, end of story.

[Bham1982]

Those things are not at all what I said, re-read and come back with an intelligible response and maybe I'll replay.

No, that's exactly what you wrote.

And spare us your threats of more nonsensical replies.

[Worldsgreatest]

you first I don't think you know what a threat is.

continue to gaslight and provide no logical point or means of discussion. those damn middle-class families and their boats! how dare they.

[Worldsgreatest]

I have to disagree.With rising rates, growing trade wars, increased vehicle longevity, an aging U.S population and a younger generation with less interest in autos, a slowdown in the auto sector is all but inevitable. And from what I am seeing it appears as if G.M and Ford are both preemptively downsizing in anticipation of such. Yes, they may be pushing resources into development of new technologies, but if they were not expecting a major slowdown they would simply do both [[Expand advanced development and maintain their current operations).

No company in the world forfeits production and earnings over the speculative feelings of a recession, that's not how cost curves work and never will, any company making such insane strategy moves would be out of business. All this happens when a recession is happening and in progress, we are not in a recession so that's not a good explanation for these buyouts.

[aj3647]

An interesting fact someone mentioned yesterday:

The first term of every presidency since Teddy Roosevelt has featured a recession.

It'll be interesting to see if we break that trend with Trump. An argument can be made both for and against it.

Republicans are artificially inflating the economy with massive deficit spending. Government is supposed to run up a large deficit when the economy is BAD, the logic being that government spending will spur economic growth. When the economy is good, we're supposed to have small deficits because there is no need for the government to spend like a drunken sailor to keep the economy going. Instead, at a time of strong economic performance, we've run up two consecutive years of massive deficit growth and next year's deficit is projected to hit almost a trillion dollars.

We have deficits now that we weren't seeing since years of the Great Recession. To compare, the last time the economy was as good as it is now [[1999/2000 under Bill Clinton), we had a freaking budget SURPLUS. Trump is keeping those economic numbers high by pumping hundreds of billions of dollars of borrowed Chinese money into the economy rather than let the economy grow itself at a more modest [[but more organic) pace. It's a house of cards and it will come crashing down, we absolutely cannot sustain a new normal of >$1 trillion deficits every year, which is what the CBO is projecting starting in 2020.

[Lowell]

Wall Street likes it. Cutting the labor force should make it even happier. GM stock shot up 9% yesterday but has given back a half percent in an up market today. Sales in China of its made-in-China vehicles were solid and big ticket sales of pickups here were good.

Higher steel cost from the trade war and rising interest rates are headwinds, but if the company plateaus at its current sales level, as it has for a while now, it will be just fine. It also pays a solid 4.5% dividend.

[hybridy]

GM halts Warren, Pontiac renovation projects as CEO Barra makes case for cost cuts

General Motors Co. is postponing renovations to its famed design studios and halting a project to update its global propulsion headquarters in metro Detroit an effort to save money.The plans for the projects in Pontiac and Warren, which were expected to cost hundreds of millions of dollars, were detailed in a long letter sent Wednesday to employees by GM CEO Mary Barra, making the case that the Detroit-based automaker needs to curtail costs to protect itself against an unpredictable future. A copy of the letter was obtained by Automotive News.
The two projects Barra cited include $180 million for a 360,000-square-foot expansion to its design studios and a new parking structure. Both were supposed to be the "final stage" of a $1 billion transformation of GM's tech center campus in Warren.

GM stock trading below $33 today - lower than initial offering in 2010

Michigan economic index hurt by stalled auto sales, home construction

Comerica Bank's Michigan Economic Activity Index fell for the third month in a row in August.It's the first three-month drop since early 2015, the bank under Dallas-based Comerica Inc. said in a Wednesday news release, attributing "lost momentum" to stagnant auto sales and stalled residential construction.
The economic indicator dropped from 118.4 in July to 118.1 in August. The August figure is slightly lower than the 2017 average of 118.2.
The August index hasn't changed much since late 2016, around when U.S. car sales started flattening out, according to Comerica. Automotive has faced higher material and labor costs, but the U.S.-Mexico-Canada Trade Agreement answers some questions.

[stasu1213]

Not a good sign for GM. They would probably hire more contractors temporarly just to save money but in the long run they will be losing money for each time contractors are hired they would have to be trained. That will cost GM money. It's amazing how things are in reversed in comparison to 40 years ago when RenCen was thriving with retail and hotel space but the rest of downtown was deteriorating at a rapid pace. Now the rest of downtown is improving as a rapid pace while the GM or RenCen is struggling to adapt to the change being that it is an island off to itself

[Onthe405]

Aside from the current or forecast state of the economy, there's also the challenging issue of market share in a crowded & competitive global market. For example, most consumers ranking reliability as a major buying decision probably wouldn't even consider a brand that barely squeaks into the top 20, which is the case this year with both GM & Ford [[Chrysler even worse):

https://www.consumerreports.org/car-...reliable-cars/

[O3H]

Trump wants cars to run on coal -- oh shit, thats where electric cars come from, the coal fired electric power plants - now go figure it out.