Published: Sat, November 03, 2018
Markets | By Otis Pena

GM to offer buyout to some workers in cost-cutting move: DJ

GM to offer buyout to some workers in cost-cutting move: DJ

GM posted a blowout third quarter with net income of $2.5 billion-25 times greater than last year's third quarter-and almost $20 billion in cash.

Eligible employees will have until November 19 to decide if they want to take the voluntary severance, said Jennifer Wright, communications director for General Motors Canada in an email to CBC News.

The company said in a separate statement that it would consider layoffs after it sees the impact of the buyouts and other cost cutting efforts.

GM announced the offers on Wednesday, the same day that the automaker's third quarter results were released, showing a strong third-quarter profit.

GM shares jumped more than 8 percent in pre-market trading.

The company has 50,000 salaried workers in North America. And its pretax profit in North America, its most lucrative market, rose 33 per cent to $3.68 billion with a profit margin of 10.2 per cent.

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GM, along with its chief USA rivals Ford and Fiat Chrysler has said it expects tariffs to reduce its profits by $1 billion in 2018 and 2019, while Fiat Chrysler has warned that rising metals costs could cost it 850 million euros ($963 million) this year and next year. Excluding one-time items, the company made $1.87, far exceeding analyst projections of $1.25 per share, according to a survey by FactSet. The Detroit automaker put up a record income of $500 million from July through September in China despite declining sales and rising trade tensions. But sales to dealers, the point at which GM books revenue, rose 4.5 per cent, to 1.13 million. The automaker is also still on the hook for its deadly ignition switches and recorded a $440 million charge in the third quarter for the related ligitation.

That includes GM transitioning its focus to self-driving vehicles and other new technologies.

The pricing gains are "absolutely sustainable", GM Chief Financial Officer Dhivya Suryadevara said. GM has said it is aiming to save $6.5 billion in "cost efficiencies" through 2018.

Last year, GM sold its European Opel and Vauxhall units to France's PSA Group.

GM, along with its rivals Ford Motor Co. and Fiat Chrysler Automobiles NV have all forecasted a substantial decrease in profits from rising steel and aluminum costs from tariffs imposed by the Trump administration.

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