GM says 5,000 of its salaried white-collar workers have accepted voluntary buyouts

About 5,000 white-collar General Motors workers have taken buyouts to leave the company, which the automaker says is enough to avoid layoffs at this time.

In a memo to employees on Tuesday, GM CEO Mary Barra said the buyouts will save about $1 billion per year in costs, about half of the $2 billion the company wants to cut annually by the end of 2024. 

She added 'a company-wide involuntary separation program is not a consideration at this point.' The company now has about 58,000 salaried workers in the US. 

The buyouts come at an uncertain time for the auto industry, which is in the midst of a transition from internal combustion to electric vehicles.  

GM has a goal of selling only electric passenger vehicles by 2035.

In a memo to employees on Tuesday, GM CEO Mary Barra said about 5,000 white-collar workers have taken buyouts to leave the company

The Detroit automaker and its competitors are making huge capital outlays to develop and build new electric vehicles, all while continuing to make cars, trucks and SUVs with gasoline engines. 

They're also spending big to get scarce minerals and parts needed for EV batteries.

'The steps we are taking will allow us to maintain momentum, remain agile, and create a more competitive GM,' the company said in a prepared statement.

GM hopes to get the remaining $1 billion in savings by reducing vehicle complexity and expanding use of shared parts on internal combustion and electric vehicles. 

It also plans to cut spending across the company, including for travel and marketing, the statement said.

At a Bank of America conference Tuesday, GM Chief Financial Officer Paul Jacobson said the company will take a $1 billion first-quarter charge because of the buyouts, but said it will save $1 billion per year as the workers leave later in in 2023. 

'You've got a pretty quick payback,' Jacobson said.

GM set a goal of cutting $2 billion from operating costs by the end of 2024, with 30 percent to 50 percent of the total being achieved this year. 

The response to a buyout program means GM will be at the higher end of that 2023 goal, Jacobson said. 

GM will cut production to keep inventories in check, Jacobson said. The automaker earlier this year shut down a pickup truck assembly factory in Fort Wayne, Indiana, for two weeks. 

Last month GM offered buyouts to white-collar workers with at least five years of service, and global executives who have been with the company at least two years.

About 5,000 white-collar General Motors workers have taken buyouts to leave the company, which the automaker says is enough to avoid layoffs at this time

At a Bank of America conference Tuesday, GM Chief Financial Officer Paul Jacobson said the company will take a $1 billion first-quarter charge because of the buyouts, but said it will save $1 billion per year as the workers leave later in in 2023

GM shares dropped in early trading on Wednesday following the news

Jacobson said the number of workers taking the buyouts is about what GM expected. The company made the offers in an effort to reach cost goals without layoffs, he said.

'It's important that we were willing to pay for the voluntary program to incent people to go who maybe were closer to retirement or had just decided they wanted a change in career or lifestyle, at the same time to do everything we can to try to avoid involuntaries or layoffs,' he said. 'And I think we´re in a position where we´re going to be able to do that.'

Employees taking the buyouts had to sign up by March 24, and those who are approved for the packages have to leave by June 30.

US salaried workers are being offered one month of pay for every year of service, up to 12 months. 

They'll also get COBRA health care and part of the bonuses they would receive this year.

Meanwhile, GM sales figures released on Tuesday showed the company surpassed Ford to become the No. 2 seller of electric vehicles in the US in the first quarter.

But GM's EV sales of 20,670 were still far below those of industry leader Tesla, which delivered more than 161,000 vehicles in the U.S. from January to March, according to estimates from Motorintelligence.com.

Ford sold only 10,866 EVs during the quarter, but the company said that's largely because it had to stop making the top-selling Mustang Mach-E electric SUV while it retooled a factory in Mexico to increase production. 

Spokesman Said Deep said the company didn't build Mach-Es for seven weeks during the quarter, cutting into sales.

Also, Ford was forced to stop making the F-150 Lightning electric pickup in February after a battery caught fire during a pre-delivery quality check. The problem was fixed and production resumed March 13.

Still, Ford's EV sales rose 41 percent above last year's first quarter, the company said Tuesday.

During the first quarter, GM delivered 19,700 of its top-selling EV, the Chevrolet Bolt hatchback and utility vehicle. Last year the company sold only 358 Bolts because available batteries had to be diverted to a recall of 142,000 older Bolts due to battery fires.