02 Nov 2018_campuscad
American automaker GM offers buyout or Voluntary severance packages to 18,000 employees.
After strong and profitable 3rd quarter of 2018 with $36 billion in revenue, GM CEO Mary Barra announced the buyout program as company is going through 4- 5 years of restructuring course.
GM is considering reducing its operational cost by $6.5 billion till 2019. Automaker also sold out its money loosing Opel and Vauxhall brand in Europe for $2.6 billion in 2017.
GM is aligning itself to the lean approach in the transport segment. Heavy trucks and SUV sale saved GM for the quarter but company can’t bet longer on these segments, market analyst said.
US market is shifting towards clean electrical vehicles with autonomous features. Electric automaker Tesla did a strong sale of Model 3 in 3rd quarter with $6.5 billion of revenue.
GM has acquired Cruise automation in 2016 for $1 billion to keep up pace with the autonomous technology developments and plans to launch 20 all-electric vehicles by 2023.
Honda recently invested more than $2.75 billion in to GM Cruise unit to develop the self driving tech.
Ride hailing startups like Uber and Lyft are also investing heavily into development of self driving tech in conjunction with Toyota, Daimler, and Volvo etc
GM cost cutting with restructuring or buyout and big bet on this technology is to make automaker itself relevant with the future and top of the market.
For weekly roundup stories, sign up below.