Did GM Have To Fire 14,000 People?
General Motors made a large and stunning announcement recently, confirming roughly 15% of its global workforce will be terminated or bought out. More than 14,000 people will be out of a job in 2019 or earlier including 25% of executives.
Under the guise of a rather positive sounding press release, “General Motors Accelerates Transformation,” company chairman and CEO Mary Barra said, “The actions we are taking today continue our transformation to be highly agile, resilient and profitable while giving us the flexibility to invest in the future.”
Seven plants will be shuttered with total cash savings resulting in $6 billion through cost reductions and lower capital expenditures.
Barra’s comments continued: “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
One of Barra’s predecessors was Charles E. Wilson, CEO of General Motors between 1941 and 1953. During confirmation hearings before a Senate Committee in 1952—where Wilson was still CEO of the company—he responded to a question about conflicts of interest by Senator Robert Hendrickson as follows:
“For years I thought that what was good for our country was good for General Motors, and vice versa. The difference did not exist. Our company is too big. It goes with the welfare of the country.”
Perhaps Wilson’s comments were a harbinger for 2019.
Tucked away in GM’s press release announcing the closures was a signal—indeed a potent portent—for the current White House administration to consider: “GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures.”
It is the sound of both innovation and sustainability.
While Tesla gets an inordinate amount of mainstream media press as it continues to accelerate “the world’s transition to sustainable energy with electric cars, solar panels and integrated renewable energy solutions,” slowly and quietly organizations like GM are being forced to do the same. It’s the 2018 version of kill or be killed.
When a company the size of GM—with more than $145 billion in annual revenues—is forced to lay off 14,000 people while shuttering seven of its plants, I wonder if the White House sees the connection to Wilson’s quote some 65 years ago.
“It goes with the welfare of the country,” said Wilson, which should frighten any senior member of Trump’s administration. America has taken far too long to curb its dependence on oil. The same might be said concerning an overreliance on all non-renewable resources.
And now—demonstrated by the example of GM—more than 14,000 people are out of work as the company tries to expedite its “next-generation battery-electric architectures.”
Who might be next?
What large organization with thousands of employees will be issuing a press release in 2019 announcing its plans to shave the workforce? What large organization will realize that its own strategy needs updating—and in an expedited fashion—such that it does not perish? What organization is currently reading the tea leaves of an old-fashioned, outdated approach to business?
I see Wilson’s comment not only as a harbinger but a renewed call for the White House and leaders from all levels of government to incentivize companies. Organizations need to expedite their innovation such that sustainable means of operating becomes the norm.
When the organization’s plans finally change, perhaps the workforce can be retrained (and retained) rather than terminated so they might be part of the solution, and assist the transformation.
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