By Gary S. Vasilash
Last week GM announced that in its efforts to “permanently bring down structured costs” it would request that its salaried employees in the U.S. seriously consider taking a buyout. In January GM execs said that their goal is to reduce $2-billion in spending. By taking a number of its 58,000 of salaried employees off the books, it reckons it will get closer to its goal.
Given that in 2022 its full-year revenue was $156.7 billion, net income attributable to stockholders $9.9-billion and EBIT-adjusted was a record $14.5 billion, it would seem to be in good shape.
But there is something that GM and all other OEMs are grappling with, and that’s the billions of dollars that need to be invested in developing electric vehicles as well as creating the means by which the vehicles and the batteries used to store the energy for those vehicles can be produced.
It is a huge—and expensive—undertaking.
And so when they look at their books and see that one non-trivial number is salaries, product trumps people in order to maintain profit.
(To be sure there are a number of people who probably have a skillset that is not particularly relevant to automobility going forward and it would probably be tenuous from a legal standpoint to single them out, which may make casting a larger net better from a corporate point of view.)
But the point is: EVs are (1) costly to develop and (2) not making money for corporations the way that gasoline-powered vehicles are (yet).
So, in order to keep earnings up and costs down, there will be people who will have to find something else to do with their working hours.
The state of EVs is the topic on this edition of “Autoline After Hours.” Joining me are Greg Migliore, editor of Autoblog and the newly launched Autoblog Electric; Chris Paukert, director of Video for Edmunds; and Matt DeLorenzo, long-time auto journalist and author of How To Buy an Affordable Electric Car.
The discussion delves into an array of EV-related topics, from affordability to charging to how long it will be until EVs are the norm and internal combustion engines are the exception.
And as for that last topic, it may be longer than you might think.
You can see the show here.