Exodus begins as GM looks to 4,000 salaried layoffs

Nora Naughton
The Detroit News
A reduction in General Motors Co.'s salaried workforce, which will see more than 4,000 employees let go, starts Monday and will take about two weeks to complete.

A reduction in General Motors Co.'s salaried workforce, which will see more than 4,000 employees let go, started Monday and will take about two weeks to complete.

Employees at several of GM's corporate offices in Southeast Michigan were called by managers throughout the day and brought into conference rooms reserved for the severance meetings. Workers at the Renaissance Center and Milford Proving Grounds saw laid-off employees surrender GM cars and ride off in car-service vehicles from Metro Cars, which were staged outside the buildings all day.

A GM spokesman said owners of company-sponsored vehicles have until the end of this month to return them, but some fleet vehicles may have been returned today.

GM confirmed the start of the layoff effort this week after declining to comment Friday on the actions.

“This is the implementation of the salaried actions announced late last year," GM said in an emailed statement. “Our focus now is on working with each individual employee on providing severance packages and transition support through job placement services.”

GM declined to identify which departments were downsized Monday. But a handful of propulsion engineers, tire- and wheel-purchasing workers and various employees at the Milford Proving Grounds were walked out, according to employees who spoke to The News on the condition of anonymity because they feared their jobs would be in danger.

Ahead of the layoffs Monday, employees on CFO Dhivya Suryadevara's financial team were encouraged to report anything that "may impact employee safety," in an internal memo obtained by The Detroit News.

"We recognize that every individual will respond differently, and we will respect and acknowledge those differences," Suryadevara wrote. "Remember that we all manage stress and emotion differently, and safety is a key element of our culture."

A spokesman for the Detroit automaker says GM has been in touch with "many Fortune 500 companies and other employers" interested in hiring employees GM employees.

Impacted employees are being connected with interested companies via outplacement services offered as part of the severances, GM spokesman Patrick Morrissey said.

The severance packages offered to laid off GM employees will be based on years of service, as was the case when the automaker offered buyouts last year to employees with 12 or more years of experience. Under GM's buyout offer, eligible employees could receive six months pay and six months health care — the maximum severance package offered by GM.

GM reiterated in its statement confirming the start of layoffs Monday that the actions are "necessary to secure the future of the company, including preserving thousands of jobs in the U.S. and globally."

The reduction in GM's salaried workforce, which will be cut by 15 percent this year or by roughly 8,000 positions, is part of a larger restructuring of the automaker's global operations. Also included in the effort are plans to cut the global executive workforce by 25 percent and indefinitely idle five North American manufacturing plants later this year.

The effort is expected to save GM up to $2.5 billion in 2019 and a total of $6 billion by 2020.

"We are a large company with significant but not infinite resources. We have to make smart, strategic – and sometimes difficult decisions about where to invest," CEO Mary Barra wrote in a LinkedIn post last week. "I’ve been a part of General Motors for 38 years, including through bankruptcy in 2009. This experience makes it clear that the long-term success of this company cannot be taken for granted. I am forever grateful for the second chance we received, and it is one of my primary responsibilities to ensure that it never happens again."

The automaker is under fire by unions in the U.S. and Canada for its plans to idle Detroit-Hamtramck Assembly, Warren Transmission, Baltimore Operations, Lordstown Assembly in Ohio and Oshawa Assembly in Ontario. 

GM and Canadian union Unifor are currently at odds over tha union's Super Bowl attack ad that ran in Canada.


Twitter: @NoraNaughton