General Motors is a technology company that makes cars, and the skills its employees had yesterday are continuously becoming outdated.
Experts said that is the underlying message of GM CEO Mary Barra's move on Oct. 31 to offer voluntary buyouts to GM's North American salaried workers with 12 or more years of experience with the company.
On the surface, it's typical to cut costs ahead of a potential dip in new-car sales and rising raw-material costs. But look closer.
"GM is signaling a change in vehicle technology. If they go into electric more rapidly, then they do not need the same engineers they have now," said Maryann Keller, principal of Maryann Keller & Associates in the New York area. "The advent of electric vehicles has profound implications for employment in the auto industry's competition and the skill sets needed to compete."
Consider that Barra hails from a human-resources background, so targeting employees with long seniority and high pay grades is strategic when a company is moving toward the development of more electric cars, fuel cells and autonomous vehicles, experts said. It means redeploying the workforce and freeing up significant capital, said Marick Masters, professor of business at Wayne State University.
"Technology has changed so fast and is changing so fast that if you've been out of school 10 or 20 years, you're not at the leading edge anymore," said Masters. "This will give GM an opportunity to create a greenfield of sorts, to create a new company within a company."
Besides wanting to be futuristic, GM's cost cutting is also a necessity.
Its current cost structure and product mix make it more vulnerable to a sales downturn than Ford and Fiat Chrysler, said market economist Jon Gabrielsen, an adviser to the auto industry. He said GM can afford to lose only a quarter of its current car sales in North America before going in the red.
GM won't say which jobs or which areas of the business it looks to trim beyond saying the offers are voluntary — for now — and will go to employees with 12-plus years experience.
But GM has been adding a younger workforce with technology-heavy skills in recent years. In fact, only about 17,700 of GM's 50,000 salaried workers in North America have the 12-plus years seniority to qualify for a buyout offer. Experts said that indicates the bulk of GM's workers are new to the company, possibly with a focus beyond traditional vehicle design and engineering.
A GM spokesman confirmed that "about 40 percent" of its U.S. workforce has been with the company five years or less.
The company's changing focus opens up opportunities to millennials, those people ages 22 to 37 who might change their perception of GM from that of a stodgy carmaker bankrupt a few years ago to a technology company that offers some advantages over that of a startup, Wayne State's Masters said.
But for older workers already in the auto industry, it means they must improve their game and continuous training is a requisite.
"I don't know if they're extinct or need a new degree, but they need to be engaged in continued learning and advancement," said Masters. "They need to be agile. Organizations do not guarantee lifetime employment anymore. This is a statement that the world is changing."