GM offers buyouts to 18K workers after posting strong profit

GM Offers Buyouts to 18,000 Workers, Months After Warning About Layoffs Over Trump's Tariffs

General Motors offers employee buyouts

The largest US automaker reported better than expected earnings on Wednesday, fueled by strong sales of trucks and crossovers in North America.

The Detroit automaker was able to push through higher pricing, mostly in North America, allowing it to benefit by $1 billion in the quarter and offsetting higher commodity costs due to Trump administration tariffs.

GM announced the offers on Wednesday, the same day that the automaker's third quarter results were released, showing a strong third-quarter profit. "The voluntary severance program for eligible salaried employees is one example of our efforts to improve cost efficiency", the company said.

GM was hit once again by costs associated with its giant recall for faulty ignition switches. The employees have until the end of November to accept, and if so, must agree to leave GM by the end of the year. With U.S. interest rates rising and the region having seen strong industry sales for several years, many believe U.S. demand also will begin to slow.

GM has cut production at auto plants over the last two years and its hourly workforce fell by 4,000 workers last year, according to GM's annual report.

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The company has 50,000 salaried workers in North America. GM has said it is aiming to save $6.5 billion in "cost efficiencies" through 2018. In addition, GM in June ended the second shift at its Lordstown, Ohio assembly plant, cutting 1,500 jobs, as demand for sedans fell sharply in the U.S.

The average sale price of a GM vehicle in the USA reached $36,000 United States, $800 US more than a year ago and a third-quarter record. This week, the No. 2 USA automaker is holding three days of meetings to discuss ways to flatten the structure of its salaried workforce and get managers to oversee larger numbers of employees.

In China, GM's largest market by vehicle sales, the automaker said it booked a record $500 million in income from its joint ventures. In an earnings conference call, he told analysts that GM is looking for cuts as it simplifies its business after its exit from Europe. Excluding one-time items, the company made $2.46, far exceeding analyst projections of $1.64 per share, according to a survey by FactSet.

Revenue jumped 6.4 percent to $35.8 billion, also topping forecasts.

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