General Motors won’t move ahead with a planned expansion of its Warren, Michigan design center, nor will its Pontiac propulsion center get the makeover GM once favored. While a shiny new parking garage became a reality before CEO Mary Barra’s aggressive cost-cutting program could kibosh it, the automaker’s planned workforce reduction might render many of those parking spaces redundant.
A letter sent to employees detailing the deep-sixed renovations and expansions, obtained by Automotive News, was sent to GM employees on Wednesday. That’s the same day news broke of the automaker’s plan to offer buyouts to 18,000 salaried employees in North America. Globally, the offer’s on the table for nearly all executives with 12 years or more experience.
“Today, our structural costs are not aligned with the market realities nor the transformational priorities ahead,” Barra wrote in the letter. “We must take significant actions now to address this while our company and the economy are strong.”
The expansion of GM’s the Warren facility, part of a larger plan to refresh its tech campus, was to be in the order of 360,000 square feet. Ditching the project frees up cash flow for the bad times GM worries might lie ahead. Certainly, a stagnant new vehicle market and serious overseas pressures are already a reality.
Not that things are grim, financially, for GM. The company’s third-quarter earnings report glowed this week, showing a revenue increase of 6.4 percent and a net income of $2.5 billion. In her letter, Barra acknowledged that the company’s stable fiscal foundation might cause employees to wonder what all the fuss is about. The company’s “profitability is only part of what is required for our transformation,” she wrote, adding that GM needs to be seen — by investors — as preparing for future shocks and building resiliency.
Wednesday’s earnings report provided a much-needed lift to the company’s stock, which had trended downward since June.
[Image: General Motors]
Pontiac Propulsion sounds like a Canada-only model.
Forward into past?
somebody look up how much $$$ GM spent on dividends and buybacks since Barra became CEO (can’t remember but it’s in the billions—would’ve been nice if the article mentioned it)
now compare that $$$ to the savings from axing those renovations. I smell penny wise, pound foolish here.
Maximum Mary.
(sorry bob)
Churning the workforce – hiring and firing – is the surest way to permanently damage a company. As examples, GE and IBM. The smart people who are not let go will be seeking employment elsewhere. GM is trading short term stock gains, for long term disaster.
Good for her! In contrast, Ford’s biggest concern is their train station for hipsters purchase/makeover.
GM, Ford, Caterpillar, and several other large corporations seem to see a storm coming.
I’m watching the casual dining stocks and holiday sales numbers very closely.
Whenever the Fed raises the rate, no matter how slightly, business tends to see a storm coming.
A friend of mine just today financed a 2019 Grand Cherokee at 6.32% for 72 months with 10% down.
WTF happened to 1.79% financing?
@ HDC 6.32% for 72 months !!!!! ..Best of luck to your friend, however I don’t think he is anticipating a storm ??
You can do better, at least in “these parts”. I joined a credit union when I bought my C7 in 2014 solely for the 1.49 loan rate. Today, I could get the same loan for 1.95. Now, actually banking there, well, that’s not happening. But credit unions are really good for loans.
Mikey, when I bought my car you said that hope all goes well – you were always on guard for the GM bashing to begin. Today the car is now 4.5 years old and other than the two simple recalls, the failure rate has been zero. GM may have f’ed up a lot, but when they do get it right, its great! I love my car!
@golden2husky….So glad to hear !!
The GM bashing is an old tired worn out song. Did they suck in the 80’s? Yup. Do they suck now? no more or less than anyone else.
I DD an 05′ Vette’ and an 08′ Suburban. The few issues I have had are what one would expect with 10 and 13 year old cars and I have zero plans of replacing or upgrading either anytime in the near future 2 to 4 years.
That deal is about your friend, not the environment.
What is his FICO? Is he in the USA? Can he afford that vehicle? Is he an unsophisticated buyer?
Grand Cherokee rate right now is 3.9% for up or 60 months from Chrysler Capital. (0% for Cherokee)
He could have done better with a non-captive finance company by about a point and a half.
Your friend has crappy credit.
@87 Morgan, a bit hypocritical dont ya think?
I, and a few of my family members own Fords of around 10 years.
Mine has 120,000 miles on it with no major, or even minor problems.
Same with the family.
So the site sponsored Ford bashing not only gets more than a little old, its played the eff out.
But you know, goose and gander.
And GM continues to sink itself into another bailout.
GM. What a joke!
The $11Billion the tax payers gave them in 2009 is no joke.
There aren’t enough people on this planet to buy GM products to keep it afloat.
we spent $580 billion on the military last year, so they could fight wars which don’t exist.
f*** off.
Don’t you lefty libbies just hate that!? Thank you President Trump!!!
$700B this year and $716B the next. AAAAANNND, I get a 2.8% pay raise in my military retirement.
So, go suck a log, and f…k yourself, a..hole.
“raise in military retirement” just another govt turd on entitlements. Can’t wait till Tuesday when Trump gets neutered.
Jimz, military spending is necessary for the defense of our country. Is some of it a kind of corporate welfare? Yes. Is the money sometimes ill spent? Yes. Probably more than sometimes. But those problems are inherent in the process, not in the need for the actual spending. I do agree the added funding the Pentagon received was not necessary – they didn’t even ask for it – but ultimately, if tax dollars spent on equipment and training results in not using it and losing troops, then that’s a fair trade. I do wish more thought was put into just what a war costs in human suffering on both sides (really) before making the jump.
Do we need to spend 10 times as much as all the other countries combined? what a racket. But boohoo the bailouts, right gomer?