General Motors laid off a total of about 1,000 salaried and hourly employees Friday morning as part of its ongoing restructuring.
The move comes after the company scaled back production of electric vehicles earlier this year and introduced a new salaried employee classification system to classify workers based on their productivity. In August, GM also laid off nearly 1,500 employees, none of them in Tennessee but mostly in its service and software divisions.
The layoffs are concentrated among the company’s employees.
Operations in Tennessee appear to be unaffected, but company officials declined to confirm whether Spring Hill employees were affected by the job cuts. GM’s Spring Hill Manufacturing plant builds the Cadillac XT5, XT6 and all-electric LYRIQ models.
In September, workers at GM’s Ultium Cells battery plant in Spring Hill joined the United Auto Workers. Ultium is a joint venture between GM and LG Energy Solution to produce batteries for electric vehicles. The UAW won contract upgrades for workers at GM, Ford and Stellantis in 2023.
The automaker will also stop using its Yuma Desert Proving Grounds in Arizona for vehicle testing in hot weather. According to updated figures, this change will affect 33 jobs. In addition, GM is permanently closing its Durability, Corrosion and Teardown departments at the Milford Proving Grounds in Michigan. The latter has led to the permanent layoffs of 44 UAW-represented hourly workers and 16 salaried employees, the Detroit Free Press has confirmed.
The latest job cuts at GM span multiple departments worldwide, said a person familiar with the situation who asked not to be identified because he is not authorized to share this information with the public. Most of the 1,000 jobs cut were salaried positions assigned to GM’s Global Technical Center in Warren, Michigan. In a government filing Friday, GM said 507 people assigned to the Tech Center were laid off.
A small number worked hourly, some of whom had union representation. The person said the UAW had been notified.
GM employed approximately 163,000 people worldwide as of December 31, according to its 2024 annual report.
GM spokesman Kevin Kelly confirmed the cuts Friday, saying:
“To win in this competitive market, we must optimize for speed and excellence. This includes working efficiently, ensuring we have the right team structure and focusing on our top priorities as a business. As part of this ongoing effort, we have made a small number of team reductions. We are grateful to those who helped build a strong foundation that positions GM as an industry leader into the future.”
A request for comment from the UAW was not immediately returned.
One employee, who worked at GM for decades, told the Detroit Free Press on Friday that in the early morning hours he received an email that began: “We are faced with the difficult decision to say goodbye to some of our colleagues.” Reference was made to business simplification, but no reason for his specific dismissal was given, nor details of severance pay. He asked not to be named due to the sensitivity of the situation and because he had not yet received severance pay, but he said he had had excellent performance ratings for years, so he would be shocked to hear if he were fired because of his performance. .
The person familiar with the GM job cuts said those laid off will receive severance pay based on their years of service and any other legal requirements in their region. This person said that some of those things that were let go “were a result of the new ranking system, but the rest was a result of business as usual, making sure you have people in the right place and doing the right thing.” GM worked with the team leaders.”
As the Free Press first reported, GM announced changes to its employee performance review system and bonus plan in August. GM said it is moving from a three-point to a five-point performance rating scale effective for the year-end performance review cycle, which typically begins in November.
As part of the new plan, GM expects each organization’s managers to rate 5% of their team as significantly exceeding expectations, 10% as exceeding expectations, 70% meeting expectations, 10% partially meeting expectations, and 5% do not meet expectations. For the 5% who don’t meet expectations, GM wrote in an email at the time, “we expect appropriate action will be taken, up to and including departure from the company.”
The person familiar with these latest cuts said many of the eliminations were done by “looking at individual roles, individual skills and making sure we have the right number of people working on the right things. It was very strategic… looking at speed and making sure people are working on the right things.”
As for the Yuma Proving Grounds, GM’s website said it employed 38 people. The person familiar with GM’s plans said some will remain to maintain the facilities. GM is closing it immediately because the company believes it can perform many of the same tests, either at its Milford proving ground or using virtual technology. GM has had its testing site in Yuma since 2009 and leases the 2,400 hectares there from the US military. GM also leases parts of it to other companies for use. GM will continue to sublease it until the lease term expires, the person said, but did not know that date.
At Milford, GM will immediately close its Durability, Corrosion and Teardown departments because much of that corrosion testing is done at the component level, so it’s more efficient to have suppliers do that testing, the person said.
GM CFO Paul Jacobson has said that while GM has cut $2 billion from its costs over the past two years, it continues to “pursue efficiencies” to not only bring its electric vehicles to variable profitability by year’s end, but also to the core activity. Variable profitability means that the revenue GM earns from the sale of the vehicle exceeds the direct costs of production. The calculation does not include operating costs or ‘fixed’ costs. Currently, EVs don’t make money for the company; GM earned most of its $4.1 billion in pretax profit last quarter from sales of gasoline-powered pickups and SUVs.
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While no further large-scale job eliminations are expected this year, the person familiar with the situation said: “Team leaders have the freedom to tailor their team based on their needs and what they are working on, but there is nothing specific .”
In the Worker Adjusted and Retraining Notification (WARN) filed with the state on Friday and obtained by the Detroit Free Press, GM says 507 jobs have been eliminated at the Tech Center in Warren. The list of jobs shows that most jobs were in the areas of after-sales engineering, architectural engineering, contact center and business planning.
It says: “From November 15, 2024, affected employees will no longer report to work, their normal work responsibilities will cease and they will be separated. Affected employees will receive payment equal to their wages and benefits as if they were employed through January 14, 2025. These separations are expected to be permanent at the GM Global Tech Center.”
— Sandy Mazza contributed to this report.
Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Learn more about General Motors and sign up for our automotive newsletter. Become a subscriber.
This article originally appeared on Nashville Tennessean: General Motors to Cut 1,000 Jobs Globally to ‘Optimize’ Efficiency
