On the heels of billions of dollars in corporate handouts payed for by Michigan taxpayers, General Motors, who is often a beneficiary of government subsidies, announced plans to cut 35,000 jobs in Michigan on Thursday.
The company said that while they are not laying employees off at this time, they are attempting to buy workers out of their contracts in a $2 billion cost-saving measure.
Last year, General Motors received nearly $1 billion in tax incentives from the Michigan government due to a promise to create thousands of new jobs from the creation of new battery and electric vehicle plants.
General Motors intent to cut tens of thousands of jobs in the state does not appear promising as the Michigan legislature just promised another $650 million in subsidies to Ford to build a battery plant.
In the case of both the Ford and General Motors subsidy, taxpayers will reportedly be stuck with an over $300,000 bill for every job created, meaning that the state will only recover a fraction of the tax revenue it cost to create the jobs.
Michigan Democrats have given out $2.9 billion in corporate handouts in less than two months in office, according to a Mackinac Center analysis.
The majority of salaried General Motors workers were offered a voluntary buyout by the automotive company on Thursday, March 9.
Michigan makes up roughly 60% of GM’s overall salaried workforce. From global headquarters at the Renaissance Center in Detroit to the tool and die fabrication in Flint, there are 35,000 salaried workers in Michigan across 25 facilities and offices.
General Motors offered all U.S. salaried employees with at least five years of service and all global executives with at least two years of service a voluntary separation package. This filter captures the majority of GM’s 58,000 U.S. salaried employees, GM spokesperson David Barnas confirmed.
The buyouts are part of GM’s plan to reach $2 billion in cost savings by the end of 2024. The company is not disclosing a target goal for buyouts.“The goal of the program is to accelerate attrition. It is also designed to help avoid the potential for involuntary actions,” Barnas said in a statement.
“By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.