GM Plans $2B In Cost Cuts After Record 2022 Earnings

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The CFO is clear that layoffs are not part of the cost-cutting strategy.

GM had record earnings of $14.5 billion in 2022 and total revenue of $156.7 billion, according to its newly released full-year financial statement. The automaker also announced a plan to cut $2 billion in costs over the next two years. It intends to make 30 to 50 percent of those reductions in 2023.

"I want to be clear: We're not planning layoffs," GM Chief Financial Officer Paul Jacobson said, according to Automotive News. "We're looking at hiring the only most strategically important roles, and we will use attrition to help manage our overall headcount."

Jacobson didn't specify how many workers GM hoped to cut. He also said the company would reduce product complexity and corporate expenses to save money.

In 2023, GM anticipates slightly lower earnings of between $10.5 billion and $12.5 billion. It plans to maintain a 50- to 60-day supply of vehicles at dealers, which is similar to the current 50-day inventory.

"We think the underlying business is going to be pretty consistent in ’23 with what we saw last year, and I think that's a slightly more bullish statement than where most of the market is," Jacobson said. 

EVs will be a big part of GM's business in 2023. In her letter to shareholders, company CEO Mary Barra said: "We are accelerating production of the Cadillac Lyriq, GMC Hummer EV, and BrightDrop Zevo 600, and we will launch exciting vehicles like the Chevrolet Silverado EV, Blazer EV, and Equinox EV."

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• GM Investing Nearly $1B To Build New V8 Engine And EV Components
• GM Has Designed A Small Electric Pickup Truck To Gauge Interest

To make sure it has the raw materials for batteries, GM just signed a $650 million supply agreement with Lithium Americas for material from mine the Thacker Pass in Nevada. It's the largest source of lithium in the US and the third largest in the world. At full production, the site should provide enough of the element for a million EVs a year

"GM has secured all the battery material we need to build more than 1 million EVs annually in North America in 2025 and our future production will increasingly draw from domestic resources like the site in Nevada we’re developing with Lithium Americas," CEO Mary Barra said about the agreement.

Source: Automotive News, GM, GM