[esel2k]

Maybe I miss the point, but why wouldn’t the ones that easily find a job (or maybe even have a next job at hand) take the payout for extra money while the ones that desperately don’t do any work or are not performing would stay? Wouldn’t this result in the wrong outcome?

[larrymyers]

You're not missing the point, though maybe it won't go as badly for a older company like GM. I got to witness this failed strategy first hand at AOL around 2010.

The people who opted into the VSP were the ones who could easily find another job, and were happy to take the money. Some of them even came right back in a consulting role after a 2 month cooling off period. The people who never even considered the offer were the low performers who knew they were getting paid far more than they could hope to command on the open job market.

GM already has a list of employees they have considered laying off to cut costs. They're hopeful that the people who volunteer are mostly on this list. Now GM can refuse to accept volunteers who they consider critical to business operations. Those people should immediately demand large pay raises.

That being said, this is pretty shitty severance package, especially since it's only being offered to people with 5 years or more of service. Unless you know you can find another job quickly why would you take a 5-12 months of pay with no extra benefits? (COBRA is about the most expensive way I can imagine to pay for private health insurance for many people.)

I suspect the worst case scenario for GM is they are about to have a ton of experienced and competent employees with important institutional knowledge walk out the door, and find themselves left with a bunch of new hires that aren't really sure how to keep the business operating at corporate.

[hd95489]

If your are a year from retirement that’s about the only reason

[tnel77]

I worked at a GM sized company right out of college and they did a voluntary early retirement thing like this. It was one week’s salary for every year of service with the company plus they’d pay your health insurance premiums for the rest of the calendar year.

They had a lot of people who planned to retire in 1-3 years take that offer and I knew quite a few who came back within a couple of months for a higher salary than they previously had.

[credit_guy]

The severance package is proportional with the length of employment at GM, which is highly correlated with the age. In this country you can't discriminate based on age, so this is a legal way to thin out the ranks of the older employees.

[rkangel]

As an aside, in the UK and EU you also can't discriminate based on age, but that means that you can't do anything based on length of service. For example, it is illegal to place a job advert requiring "x years of experience in z" because that requires you to be a certain age.

[thfuran]

Yeah, the US actually has "people over 40" as a protected class rather than outright banning discrimination based on age.

[jalk]

Perhaps not with a specific number of years, but you are certainly not obliged to consider every recent graduate who applies for your senior position

[rkangel]

No, but you have to look for (and talk in terms of) actual level of capability rather than just "you've done it for a while".

[chii]

> thin out the ranks of the older employees.

so is this desirable to the company because older aged workers aren't as productive as a younger person? I would've imagined that in most skilled trade, experience accounts for a lot.

[credit_guy]

The article states that this offer is for the white-collar employees

  General Motors will offer voluntary buyouts to a “majority” of its U.S. white-collar employees, according to a letter sent to workers Thursday from CEO Mary Barra.

[SkyPuncher]

Older workers tend to be more expensive because of their experience.

This is also a way to "encourage" those considering retirement to do it on your terms.

[red-iron-pine]

Lowering salaries. You're not paying Boomer rates to experience folks, you're paying Zoomer rates to noobs, and automating or offshoring the rest.

[s3p]

Maybe. Neither you nor OP nor I know.

[dragonwriter]

> In this country you can't discriminate based on age

You can’t legally discriminate against people because of age over 40; otherwise age discrimination is legal.

Also, most forms of illegal discrimination are routine, much of the work of HR and management training in regard to discrimination exists to make sure that hiring managers know what domcumentation needs to reflect irrespective of the true basis of personnel decisions so that illegal discrimination is difficult to prove (that’s not how it is framed, of course, because the training itself is part of the record.)

[pmontra]

Yes but they are only thinking about cutting costs. If company know how is cut as collateral damage, they couldn't care less.

It's another round of Finance vs Industry.

[dsfyu404ed]

While I'm sure people playing that game are a sizeable chunk of the pie chart who will take the buyout I think that people looking to get out of their current role for an actual reason independent of "I think I can take the cash, get a new job and come out ahead financially" will make up the overwhelming majority. This is GM we're talking about, not Trendy Tech Startup #8239422834237.

[re-thc]

Oh wow you actually see people as individuals!

It's often a numbers game and where anyone that passes the interview at the same level = the same so to them (management) it's just about reducing the numbers. No 1 is better or worse so it makes no difference who goes.

[pydry]

Is there a way to easily target layoffs at under performers?

I've never seen layoffs done well. The selection has always seemed somewhat arbitrary, and not through want of trying.

[hd95489]

It should be simple just offer more to employees who score the lowest in the stacked ranking

[pydry]

That sounds like a recipe to get everybody performing worse.

[hd95489]

Don’t make a habit out of it

[SkyPuncher]

Having gone through the 2008 crash in an automotive family - it can be extremely difficult to find a new job without having to relocate or take a significantly longer commute.

The physical nature of engineer and manufacturing means facilities are spread all over a metropolitan area. Particularly, manufacturing tends to be built agricultural property that's on the edge of suburbia.

[s1mon]

I worked at a company which had a VSP in the largest location. Effectively a lot of the best people left. It doesn’t seem like a great strategy. Unfortunately it was partially done that way due to the local employment laws.

[Havoc]

Correct.

It's the only legal option though. "We're gonna lay off all the lazy ones in bulk" gets you into trouble

[GoToRO]

CEO is not a visionary, not even a leader. Few are. Just an accountant. Probably a bad one too.

[dwighttk]

Maybe they didn’t offer buyouts to the ones that they want to keep around.