COLUMN: How I feel about the General Motors layoffs
David and Zoe Newmann hiking through Young State Park in Boyne City, Michigan, Dec. 27.
I was lounging on a black computer chair on the fourth floor of Moore hall in a reporting class reviewing top news stories when I first heard of a corporation announcement that hit a little too close to home.
It was Monday Nov. 26, and General Motors, had just announced its plans to lay off more than 14,000 employees in North America.
I remember sitting in class and frantically texting my father about the news and asking him if he had lost his job or if the layoffs even included his position at GM. His response was “We don’t know yet but the world will turn, I know that for sure. Please don’t worry, Zoe.”
But how could I not?
The job cuts are coming from the North American offices and target about 4,000 white collar workers and 6,200 factory jobs. According to Automotive News, GM did not definitively say it would close the North American plants such as Oshawa Assembly in Ontario, Lordstown Assembly in Ohio and Detroit Hamtramck Assembly, but rather production would end and plants would not be given new vehicles to build. Although, powertrain plants in Warren, and Baltimore have not had products assigned since Jan. 1, 2019.
CEO Mary Barra sent out an email to all 50,000 salaried GM employees in North America before the announcement, offering voluntary buyouts to those with 12 years or more experience before the layoff announcements. The Detroit Free Press reported that GM had 17,700 salaried employees who met that criteria. It was difficult to realize that one of the 17,700 was my father.
Eligible employees had until Nov. 19 to decide. The severance packages included salary, and benefits for six months after an employee’s last paycheck. Executives could leave in December with an effective last day of Feb. 28 and receive a full year of salary and benefits, according to the severance materials.
My initial reaction to the layoffs was fear. I am a Central Michigan University student with a little sister entering college after I graduate this May. I was afraid for my parents, their retirement plans and our financial security.
The layoffs were announced in November and it was not until Feb. 4 that we heard the news about my father’s job status. He is still employed at the company he has dedicated almost 29 years to.
My family tried not to dwell over the anxiety we all shared regarding my fathers’ job over the holidays. It has something we had been through as a family before, during GM's bankruptcy. My father was the most composed during this waiting period.
When my father received his email, it was a relief. He continues to work hard and contribute to GM’s success and growth. I know that my father has earned his spot at GM but it is still hard to forget that other families didn't receive the same news.
After doing some research on the layoffs, I began to understand the reasoning behind them. The layoffs, the halt in production of six car models and the closing of factories, were meant to downsize GM before the next downturn in the automotive industry. Although three months of not knowing whether my father had a job or not was difficult, I am still able to realize GM was just reacting to changing political climate, advancements in technology and what consumers in North America want.
General Motors announced that the layoffs were triggered by a change in a strategic direction. “We recognize the need to stay in front of the changing market conditions and customer preferences to position our company for long-term success,” the company announced.
Laying off 15 percent of its staff was just the beginning of the transformation and making room for future job opportunities and a more successful GM. The company expects to save up to $2.5 billion in costs this year and a total of $6 billion by 2020. There is also a less than ideal political climate for the automotive industry. The company buyouts were offered in October, four months after steel tariffs were imposed by President Donald Trump. When it becomes more expensive to produce cars, corporations have to react accordingly.
The layoffs and factory shutdowns in North America are also a direct result of the consumers. All North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. According to the Chicago Tribune, in October, almost 65 percent of new vehicles sold in the U.S. were trucks or SUVs. That figure was about 50 percent just five years ago.
Jim Hackett, Ford’s CEO, also worked on a $25.5 billion reconstruction plan in 2018 that included layoffs, in hopes to remain competitive. The American auto industry continues to face challenges. Layoffs are just one way corporations can get through or prepare for economic hardships.
Even though there is a lot of tension regarding GM, good things are happening at the cooperation. GM announced its global product development workforce is working to drive “world-class” levels of engineering in advanced technologies and that its new resources allocated by the transformation will go towards electric and autonomous vehicle programs that will double in the next two years.
As technologies in the automotive world advance, so do the employees. The layoffs just signaled a change in the type of workers entering the automotive industry.
"We are going to continue to hire, because when we look at the skill sets that we need for the future, the vehicle has become much more software-oriented, when you think about the hundreds of millions of lines of code that are in a vehicle that operates today," Barra told reporters at Automotive News. "That's only going to increase."
The GM transformation process will not be easy, and will continue to be misunderstood until Americans see the environmental and technological advancements that are made by the corporation. The company continues to hire new employees that better fit the new automotive industry.
As a daughter of a GM employee, it was hard to understand the reasoning behind the layoffs. But as someone who appreciates automotive advancements, I had to look at the big picture, which is an environmentally friendly and safer future for transportation.
