[drbig]

> General Motors will offer voluntary buyouts to a “majority” of its 58,000 U.S. white-collar employees,

> The buyout offer comes after the Detroit automaker said last week it would terminate about 500 salaried positions globally.

How does that work? The only sensible explanations I currently see is that either there's some new technology that replaces _hundreds_ of people or that... they had _hundreds_ of people that weren't doing anything useful?

I find it difficult to reconcile. Am I missing something?

[michaelt]

If a car company needs to cut costs they've got a variety of options.

They can trim the product line-up - Wikipedia tells me Chevrolet alone has a product lineup of 10 cars, 12 crossovers/SUVs, 5 vans, 5 trucks, and 3 commercial trucks.

Or they can reduce the number of marques they operate (Chevrolet is just one of seven brands)

Or they can stretch out product refreshes. Maybe SUV #8 only needs a 'facelift', rather than a new 'generation'

They can also cut long-term investment in products they think don't have a long-term future. Would you invest in a new factory for casting engine blocks, when everyone knows EVs are the future? If you're flush with cash you might bet on both horses, but if you need to tighten your belt you might not.

I'd wager that, while the 'majority' of employees are offered the buyout, the EV folks probably aren't among them.

[SkyPuncher]

While it use to be different, many of these vehicles are sharing common development platforms. Particularly, between brands, the core vehicles are shared with mostly changes to fit-and-finish and easily swappable parts (like tires, brakes, shocks, struts, etc).

[Spooky23]

It’s a forcing function. In the army people get shot and you fill the gap somehow. Same concept here. They squeeze and the remaining people deal with it as best they can.

Remember these companies are run by Excel. They kicked themselves in the ass when the pandemic started by shutting down and running “We’ll miss you” ads. This is a similar, equally dumb move.

[kurthr]

Rapidly rising interest rates have hit payment sensitive car loans first (since they are shorter than housing and the collateral is harder to collect) and there was already a collapsing COVID bubble in prices due to supply chain disruptions.

They likely won't sell as many cars at relatively high margins over the next few years as they were planning on so they're looking to cut costs.

[bell-cot]

> ...won't sell as many cars at relatively high margins over the next few years...

To judge by the venting of a car-buff coworker, who needs to buy a slightly-affordable car for his son, the days of lower volumes & margins on cars may be a bit further out.

[remarkEon]

The thing you are missing is that managing large organizations of people is hard, and while you can reduce it to a spreadsheet it's a little rude to do that.

Anyway, that GM is offering buyouts means they think the recession that has been on the horizon for N number of months is finally here.

[drbig]

> managing large organizations of people is hard

That did spark a thought: They are set up for "producing, selling and servicing" X vehicles a year, but the market shrunk and the best they can hope for now is a 1/100 of X... Thus, they don't need as many people. Or in other words "downsizing to match the reality".

So far I like this explanation the most.

[Shank]

Well, some percentage of people won't accept the buyout. It's not as if it's just free money -- it's free money for the stress and anxiety associated with being jobless. I'm sure they have a good idea of the number of people that they project will leave based on this, and they can always counteroffer if it turns out that more people than they expect will quit. The upshot to this over layoffs is that people can self-select. If 10-20% leave that's probably well within expectations.

[chii]

i wonder if these buyouts are more or less expensive than severance packages.

If you know your severance would be higher than the buyout, why would you accept? If the buyout is higher than severance, then the company is "losing" money doing the buyout isn't it? I suppose keeping good reputation/PR is worth something...

[lotsofpulp]

Unless there is a union agreement for severance, there is no need for a business to offer severance.

[sokoloff]

It’s not necessary for someone to be “[not] doing anything useful”, but a much lower standard of “not doing enough to useful to be worth paying them what we pay them”.

If you have hundreds of people creating $50K/yr of value and you’re paying them $80K/yr, you’re losing money even though they’re all doing something useful.

[drbig]

Good point. And it opens up the broader topic of measuring impact/value.

My personal experience from the startup world is that I fill in "auxiliary" but crucial roles which at the same time are not roles that can have an economic surplus (nah, not even break-even!) if we were to go "a dedicated person for each role".

Paraphrasing one of the up-thread commenters: _Yes, it's hard_.

[inhumantsar]

Every large enterprise as a subset of people who spend their time pretending to work rather than actually working.

Remember that 500 out of 58,000 is only 0.9%.