General Motors, along with Stellantis, must negotiate new contracts this year with the UAW and Canada’s Unifor union covering hourly employees. Union officials have signaled that they will push for higher pay from the Detroit 3 given their sizable profits in recent years.
Should hourly compensation costs rise under the new contracts, salaried cutbacks could be an offset as GM manages its overall staffing costs, said David Whiston, U.S. autos equity analyst with Morningstar Research Services.
Legacy automakers need to minimize costs to stay competitive in the market, particularly relative to Tesla, Whiston said.
Barra has insisted that GM will achieve its cost-cutting targets without layoffs — through attrition and other means, such as reducing vehicle complexity and sharing more subsystems between internal combustion and EV programs. But she raised that possibility this week in a memo to employees, saying that “taking this step now will help avoid the potential for involuntary actions.”
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