| Having advised Auto Executives going on 20 years… (crazy how time flies) you end up collecting a lot of data along the way. Like other cyclical industries, organizational planning can be a rollercoaster ride from 0% finance incentives pulling forward product demand to the over/under employment situations it creates. Couple this with the directional shift of the industry and it results in CEO comments like:
“We absolutely have too many people in some places, no doubt about it,” said Jim Farley, CEO of Ford in a analysts call. “We have skills that don’t work any more, and we have jobs that need to change.”
Fun Fact: Did you know that Jim Farley is the cousin of past comedian Chris Farley?
And if “change” is on the horizon, the historical auto buyouts may be communicating something:
· GM 2023: 12 Mos Pay for 12+ Years Service
· Ford 2022: 4 Mos Pay for 10+ Years Service
· Ford 2020: 6 Mos Pay for 12+ Years Service
· GM 2018: 6 Mos Pay for 12+ Years Service
This recent GM buyout offer is the largest buyout offer of recent memory. Now that doesn’t mean that it makes sense for everyone, as each individual decision needs to be made with custom analysis based on their specific situation BUT it does feel like GM is sending a message that they are serious about reducing their current staff with involuntary layoffs being mentioned as the next shoe to drop.
GIVEN ONLY 2 WEEKS TO MAKE THIS LIFE CHANGING DECISION, it will create anxieties for those offered (keep us in mind if you know anyone who might need some help?) and a tea leaf into Mary Barra’s vision of her future workforce.
*The Detroit Free Press asked for perspective on this situation from SGH’s Sam G Huszczo, CFA, CFP in the Top Link Below:
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