Employees at a GM engineering plant in Pontiac, Michigan are first up in the company’s plan to reduce its workforce.
This week, General Motors moved to terminate a “very small number” of contract employees, according to an Automotive News report. The company’s global product and engineering group in Pontiac, Michigan started releasing contract employees a month ahead of its announced plans to start laying off 15 percent of its salaried workforce. General Motors also announced plans to close five of its plants by the end of 2019, much to the consternation of local unions and the White House.
Pat Morrissey, a spokesperson for GM, stated the cuts were part of the company’s effort in “significantly reducing” its contract workforce. Doing so is part of the cost-cutting measures announced last month. More comprehensive cuts, including a quarter of GM’s executives, are set to begin in January. The company did not specifically mention exactly how many workers will be affected in this cut. General Motors also recently closed a round of buyouts for 18,000 salaried employees who were with the company 12 years or longer.
By the time it’s all said and done, the automaker expects to rack up about $6 billion in cash savings by 2020. That figure includes $4.5 billion in cutting costs, as well as $1.5 billion in reduced capital expenditures.
General Motors CEO Mary Barra currently faces immense pressure from all sides on the company’s decision to cut its workforce. Shortly after the original announcement, GM released a statement emphasizing GM’s investment in U.S. manufacturing. “Many of the U.S. workers impacted [by GM’s plant closures] will have the opportunity to shift to other GM plants where we will need more employees to support growth in trucks, crossovers and SUVs.”
For now, however, the focus remains on GM’s painful process of downsizing its white-collar workforce and restructuring the business in the years ahead.