To speed up the regular attrition process and the resulting cost savings, General Motors (NYSE:GM) on Thursday disclosed a voluntary separation program in its 8-K filing. The program is part of a cost-cutting initiative that the business indicated it will launch in January to reduce fixed costs by $2.0 billion each year by 2024.
According to the VSP’s provisions, qualified workers who opt to leave the company will be presented with a mix of lump sum payouts and other benefits based on their years of service. The business anticipates a range of pre-tax expenses related to employee separation of up to $1.5 billion, almost entirely cash-based, and a range of pre-tax, non-cash pension curtailment expenses of up to $300 million.
The automaker expects that all of the charges will be viewed as extraordinary for the purposes of adjusting automotive free cash flow, EPS, and EBIT. The business anticipates that the majority of these expenditures will be spent in the first half of 2023, with some additional expenses occurring throughout the rest of the year, and that all cash payments will be largely made by the end of 2023.
Shares of General Motors are down 0.10% in early trading on Thursday.