Barra Sends Renovators Packing As Cost-cutting Drive Continues

Steph Willems
by Steph Willems
barra sends renovators packing as cost cutting drive continues

General Motors won’t move ahead with a planned expansion of its Warren, Michigan design center, nor will its Pontiac propulsion center get the makeover GM once favored. While a shiny new parking garage became a reality before CEO Mary Barra’s aggressive cost-cutting program could kibosh it, the automaker’s planned workforce reduction might render many of those parking spaces redundant.

A letter sent to employees detailing the deep-sixed renovations and expansions, obtained by Automotive News, was sent to GM employees on Wednesday. That’s the same day news broke of the automaker’s plan to offer buyouts to 18,000 salaried employees in North America. Globally, the offer’s on the table for nearly all executives with 12 years or more experience.

“Today, our structural costs are not aligned with the market realities nor the transformational priorities ahead,” Barra wrote in the letter. “We must take significant actions now to address this while our company and the economy are strong.”

The expansion of GM’s the Warren facility, part of a larger plan to refresh its tech campus, was to be in the order of 360,000 square feet. Ditching the project frees up cash flow for the bad times GM worries might lie ahead. Certainly, a stagnant new vehicle market and serious overseas pressures are already a reality.

Not that things are grim, financially, for GM. The company’s third-quarter earnings report glowed this week, showing a revenue increase of 6.4 percent and a net income of $2.5 billion. In her letter, Barra acknowledged that the company’s stable fiscal foundation might cause employees to wonder what all the fuss is about. The company’s “profitability is only part of what is required for our transformation,” she wrote, adding that GM needs to be seen — by investors — as preparing for future shocks and building resiliency.

Wednesday’s earnings report provided a much-needed lift to the company’s stock, which had trended downward since June.

[Image: General Motors]

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  • APaGttH APaGttH on Nov 02, 2018

    GM, Ford, Caterpillar, and several other large corporations seem to see a storm coming. I'm watching the casual dining stocks and holiday sales numbers very closely.

    • See 7 previous
    • Spartan Spartan on Nov 05, 2018

      @highdesertcat Your friend has crappy credit.

  • And GM continues to sink itself into another bailout. GM. What a joke!

    • See 5 previous
    • JD-Shifty JD-Shifty on Nov 03, 2018

      @golden2husky Do we need to spend 10 times as much as all the other countries combined? what a racket. But boohoo the bailouts, right gomer?

  • Analoggrotto By the time any of Hyundai's Japanese competitors were this size and age, they produced iconic vehicles which are now highly desirable and going for good money used. But Hyundai/Kia have nothing to this point that anyone will care about in the future. Those 20k over MSRP Tellurides? Worn out junk sitting at the used car lot, worn beyond their actual age. Hyundai/Kia has not had anything comparable to the significance of CVCC, 240Z, Supra, Celica, AE86, RX-(7), 2000GT, Skyline, GT-R, WRX, Evo, Preludio, CRX, Si, Land Cruiser, NSX etc. All of this in those years where Detroiters and Teutonic prejudiced elitists were openly bashing the Japanese with racist derogatory language. Tiger Woods running off the road in a Genesis didn't open up a moment, and the Genesis Sedan featuring in Inception didn't matter any more than the Lincoln MKS showing up for a moment in Dark Knight. Hyundai/Kia are too busy attempting to re-invent others' history for themselves. But hey, they have to start somewhere and the N74 is very cool looking. Hyundai/Kia's biggest fans are auto Journalists who for almost 2 decades have been hyping them up to deafening volumes contributing further distrust in any media.
  • Bd2 Other way around.Giorgetto Giugiaro penned the Pony Coupe during the early 1970s and later used its wedge shape as the basis for the M1 and then the DMC-12.The 3G Supra was just one of many Japanese coupes to adopt the wedge shape (actually was one of the later ones).The Mitsubishi Starion, Nissan 300ZX, etc.
  • Tassos I also want one of the idiots who support the ban to explain to me how it will work.Suppose sometime (2035 or later) you cannot buy a new ICE vehicle in the UK.Q1: Will this lead to a ICE fleet resembling that of CUBA, with 100 year old '56 Chevys eventually? (in that case, just calculate the horrible extra pollution due to keeping 100 year old cars on the road)Q2: Will people be able to buy PARTS for their old cars FOREVER?Q3: Will people be allowed to jump across the Channel and buy a nice ICE in France, Germany (who makes the best cars anyway), or any place else that still sells them, and then use it in the UK?
  • Tassos Bans are ridiculous and undemocratic and smell of Middle Ages and the Inquisition. Even 2035 is hardly any better than 2030.The ALMIGHTY CONSUMER should decide, not... CARB, preferably WITHOUT the Government messing with the playing field.And if the usual clueless idiots read this and offer the tired "But Government subsidizes the oil industry too", will they EVER learn that those MINISCULE (compared to the TRILLIONS of $ size of this industry) subsidies were designed to help the SMALL Oil producers defend themselves against the "Big Oil" multinationals. Ask ANY major Oil co CEO and he will gladly tell you that you can take those tiny subsidies and shove them.
  • Dusterdude The suppliers can ask for concessions, but I wouldn’t hold my breath . With the UAW they are ultimately bound to negotiate with them. However, with suppliers , they could always find another supplier ( which in some cases would be difficult, but not impossible)