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?

  • VoGhost Matt, you say 'overpriced', but don't you mean 'underpriced'? It's when a manufacturer underprices, that dealers add their markup. If they were overpriced, the dealers would discount.
  • Bobbysirhan I'm surprised by the particular Porsches to make the list, and also by the Cadillac. Most of all, I'm shocked that the 2-door Mini Cooper is on here. I didn't even know they still made them, let alone that anyone was still buying them.
  • Ajla I assume the CT5 is on the list due to the Blackwing variant.It would be interesting to take the incentives that existed in October 2019 and include that in an analysis like this as well. The thing about the used market is that while you'll pay less in total dollars, in some cases the percentage increase from 2019 is even worse than with new cars. Buying a Saturn Relay for $6k isn't exactly a winning move.
  • VoGhost Reminder: dealers exist to line the pockets of millionaires who contribute to local politicians.
  • Cprescott The pandemic changed the sales game. No longer do dealerships need inventory. After two years people are accustomed to having to order what they want and then extorted on the price by the dealer for that privilege. Now used cars with 75k are selling for $5k more than I paid for my 21k, 2016 model back in January 2019. I pray my car won't get totaled and I have but 13 payments left to make on it. I may never buy another car again.