GM puts generous buyout on the table: What salaried workers should consider
Susan Tompor | Detroit Free Press | March 10th, 2023
An ordinary Thursday turned into a day of uncertainty and confusion when General Motors salaried workers heard that voluntary buyouts, which some dub as generous offers, were suddenly on the table.
Anyone who wants to go has until noon, Eastern time, March 24, to decide. Yes, we’re talking about just two weeks here to figure out if you’d stay or go.
Phones start ringing
Financial advisers like Sam Huszczo said their phones started ringing off the hook Thursday once GM told salaried workers about the buyout packages to reduce its costs and workforce.
“A rich offer like this is showing that they’re serious about that strategy,” said Huszczo, a chartered financial analyst in Southfield.
Some employees might be surprised to hear about a buyout now, he said, because often automakers have rolled out such deals around August or September. The news of the latest buyout comes early in the year. And it’s got some real money behind it.
“This feels like GM is just trying to throw money to solve this issue at the moment. And it will give a nice transition to the people who take it,” Huszczo said.
The latest GM offer, Huszczo said, is better than a voluntary buyout back in 2018 when a GM employee with 12 years of service was offered just six months in severance. In 2018, financial planners said, clients saw offers of up to six months of severance, including health care coverage during that time. Those on the executive level received one year of severance in 2018, planners said.
The 2023 offer is being made to all U.S. salaried employees with five years or more of service as of June 30, 2023. A buyout offer is being made to all GM global executives with at least two years of service.
GM said it is offering three packages based on level and service to the company.
“This GM offer is a good offer,” said Huszczo, who has reviewed auto buyouts for clients for several years.
“It doesn’t mean everybody should take it. But it is an offer that I think is better than what we’ve seen in the past.”
Some details of the deal
GM’s Voluntary Separation Program, based on a memo obtained by the Free Press and sent to U.S. salaried workers Thursday, includes the following:
- Severance: “One month of pay for every year of service up to 12 months of pay, paid as a lump sum,” according to the GM memo.
- Some money for health coverage: “Employees enrolled in the company’s group medical plan will receive an additional lump sum payment that equals their monthly cost to continue group health benefits under COBRA, for every year of service up to 12 months,” the memo stated.
- Keeping some bonus cash: The bonus would be pro-rated for the 2023 performance year, paid as a lump sum, according to the memo.
- Help looking for work: “Outplacement assistance, if requested, for 3 months.”
- They can keep the car for a little while. GM’s memo said: “Most company vehicle drivers may retain the use of their company vehicle until their final day of employment or April 28, 2023 (whichever comes later), with some exceptions.” The employee is going to be responsible for all fuel expenses and maintenance once they are no longer actively working.
Tough discussions ahead in next few days
Huszczo said it’s important to take a hard look at the data — and various scenarios for your future ― before making any decision. How much debt are you carrying? How likely is it that you can you easily move forward elsewhere?
Having a choice on what to do next is far better than being shown the door.
Even so, you cannot make a big move just because you’re worried that another round of layoffs is ahead. Or allow the emotional roller coaster to get the better of you simply because a decision is needed in just a few weeks.