DETROIT _General Motors salaried workers heard the news of voluntary buyouts in an email Wednesday morning. And many didn't wait long to track down what they needed to do.
"I was trick or treating with my kids and they're emailing me saying 'Hey, what do you think of this?'" said Michael Foguth, a financial planner who has GM clients.
Foguth, president and founder of Foguth Financial in Brighton, Mich., said he was surprised by how quickly the buyout packages were distributed after the announcement.
GM is sending the packages to 18,000 white collar workers who have been on the job at the automaker for 12 years or more. The workers have until noon Nov. 19 to decide.
GM has not disclosed what's being offered, but local financial planners say their clients are getting offers of up to six months of severance pay, including health care coverage during that time. Those on the executive level are receiving one year of severance, planners said.
Yet how the workers know what to do?
Three simple questions are a good starting point before agreeing to an early retirement or a buyout, Foguth said.
�� Are you mentally prepared to stop working?
�� Will you have a source of income for the rest of your life?
�� Who else will this decision impact? A spouse? Children? Other family members?
While it's a chance to quit your job and move on, it's not as simple as just signing a few papers and packing up a few boxes.
On one hand, buyouts can offer options. We're operating in a time of low unemployment where it may be possible to find another job or begin off a new career.
On the other, such cost-cutting puts stress on many long-term employees who have shown a great deal of dedication to their companies. Many don't know what to do next but they're looking at possibly making a life-changing decision soon.
No one is forced to take a voluntary buyout.
David Kudla, CEO of Mainstay Capital Management, said his firm has been hearing from GM clients. Many are setting up meetings to review what's being offered and how it might hit their finances.
Everyone's financial situation is different
Some are worried about the possibility of layoffs ahead _ if enough voluntary buyouts are not taken.
Yet Kudla suggests that people take a hard look at their personal situations and not operate on the fear of what might or might not be ahead.
"There's an emotional decision and a financial decision," Kudla said.
He heard from one client who is 59 and thought a buyout would be a perfect move for him, given that he thought about retiring next spring anyway.
But Kudla said a buyout wasn't right for that potential retiree who had not yet accrued his maximum pension benefit. By waiting just a few more months, the GM worker would be able to get a pension check that was 50 percent more than if he left earlier, under the Voluntary Severance Program.
"It's six months of pay, but it's only six months of pay." Kudla said.
It's important to review how one's pension, health care and other benefits might be affected before agreeing to a buyout, he said.
"You need to look at what else is being affected before you do it," he said.
Sam Huszczo, a chartered financial analyst in Southfield, said he's heard from some GM employees who are upset by the offer.
"They felt like they've given their lives to this company," Huszczo said. "There's a huge feeling like they're trying to get 'younger and cheaper.'"
If not enough people volunteer, GM has said it would re-evaluate layoffs next year.
"It's a thinly-veiled version of downsizing in general," Huszczo said.
Companies that are concerned about sales growth may want to trim their staff to become more competitive. GM lists its justification in its buyout package, noting that they learned much from bankruptcy and recognize the challenges ahead, including concerns related to trade with China, analysts said.
Some big names that announced buyouts in the fall include giant drugmaker Pfizer, which is offering early retirement to U.S. workers, and U.S. wireless carrier Verizon. (Gannett, which owns the Detroit Free Press, extended a voluntary buyout to employees 55 and older in the company with at least 15 years of service in October.)
Buyouts may be on the rise but aren't close to the levels during 2009, according to job placement firm Challenger Gray & Christmas.
So far through October this year, 46,100 jobs were eliminated nationwide through voluntary severance. That compares with 4,829 in 2017. The peak was 63,567 in 2009 since the company began tracking such data in 2007, according to Challenger Gray & Christmas.
Nearly 10.5 percent of job cuts announced were because of voluntary severance _ the highest percentage on record. That's up from 1.15 percent in 2017.
"We're seeing an increase in these kinds of offers at companies in industries experiencing disruptions, like tech and automotive," said Colleen Madden Blumenfeld, a spokeswoman for Challenger Gray & Christmas in Chicago.
She attributed some of the shift to tariffs that are taking a toll on heavy manufacturers and others and technological shifts, such as the development of self-driving cars.
"Couple this with investor concerns of a downturn, and companies are going into a cost-cutting mode," Blumenfeld said.
What kind of cost-cutting, though, would workers face if they take buyouts?
"This is where you have to read the fine print and get out the calculator," said Robert Bilkie, president of Sigma Investment Counselor in Northville, Mich.
"It becomes a pure numbers game. How much do you need to live? How long might you live? What other savings do you have, and what might you earn on your investments to carry you through your remaining years?" Bilkie said.
Michael Tyranski, a senior vice president and wealth management adviser for Merrill Lynch in Bloomfield Hills, said a buyout isn't a good idea for people who aren't close to retirement or haven't achieved their net-worth goal for their retirement nest egg.
"It has to make financial sense, given your goals and objectives," Tyranski said.
