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<ul><li><keyword id="19906086" type="General" weightage="100" keywordseo="General-Motors" source="keywords" meta.keywordsubtype="org" meta.entityname="General Motors" meta.hostid="261" meta.entityid="General Motors">General Motors</keyword> laid off over 1,000 employees</li><li>An employee who lost his job reacted to <keyword id="19916567" type="General" weightage="20" keywordseo="layoffs" source="keywords">layoffs</keyword></li><li>He says the company lacks empathy</li></ul> The mass layoff spree at <keyword id="19959118" type="General" weightage="20" keywordseo="Twitter" source="keywords" meta.keywordsubtype="org" meta.entityname="Twitter" meta.hostid="261" meta.entityid="Twitter">Twitter</keyword> (now called X) back in November 2022 got the world's attention and soon, people on LinkedIn were empathizing with the ones who were affected by the <keyword id="19942952" type="General" weightage="20" keywordseo="job-cuts" source="keywords">job cuts</keyword>. After that, many companies began laying off employees and that resulted in the entire job market being in a state of flux. We're almost at the end of 2024 and this year too, <a href="https://www.businessinsider.in/tech/news/cutthroat-colleagues-meaningless-work-ex-google-employee-shares-how-he-saw-the-company-change/articleshow/112421520.cms" data-type="tilCustomLink" target="_blank">several companies laid off employees</a> left, right and center. The latest one to carry out layoffs is General Motors. <h2>General Motors cuts 1,000 jobs</h2>The popular car company reportedly laid off more than 1,000 employees recently. The company reduced its workforce by approximately 600 positions at its tech campus near Detroit, as part of an effort to streamline operations. The company, in a statement to CNBC, said, "As we build <keyword id="6372405" type="General" weightage="20" keywordseo="GM" source="Orion">GM</keyword>'s future, we must simplify for speed and excellence, make bold choices, and prioritise the investments that will have the greatest impact." <a href="https://www.businessinsider.in/careers/news/work-life-balance-is-a-myth-photo-of-man-working-in-front-of-momo-stall-goes-viral-internet-reacts/articleshow/112516510.cms" data-type="tilCustomLink" target="_blank">Some of the employees</a> who were affected by the job cuts have started reacting to the same on LinkedIn. <h2>'General Motors lacks empathy, we are nothing but numbers,' says employee</h2>One of the employees shared his experience on LinkedIn, expressing shock and disappointment over the way the situation was handled. He arrived at work only to find that his badge had been deactivated, his access to company systems revoked, and instructions from GM Security to leave the premises. He mentioned that he couldn't even say goodbye to his colleagues or express gratitude for the memories they shared. "I was unable to tell my coworkers goodbye, thank them for the many memories we had. I couldn't do anything but stand there in shock," his post read. The employee revealed that the only prior notice came in the form of a 5 AM email, which he hadn't seen. The email talked about the importance of the Software and Services division to GM's future and the need for bold decisions to enable faster progress and effective investment. The ex-GM employee also criticised the company for lacking empathy and compassion, arguing that these qualities distinguish being bold from being ruthless. He felt that employees are treated as mere numbers, expendable in the pursuit of profit, despite GM's recent financial success. "We are nothing but numbers to them, fat to be trimmed off in the pursuit of the almighty dollar. Even though they recently celebrated a $4.6B profit in Q2 2024, that was not enough for them. We were not even given the common decency to say goodbye, just thrown onto the curb like useless trash," he wrote in his post. <div type="Article" hostid="261" msid="112421520" title="‘Cutthroat colleagues, meaningless work': Ex-Google employee shares how he saw the company change" mstype="2" mssubtype="0"></div>

'We are nothing but numbers to them, fat to be trimmed off': General Motors employee reacts to layoffs

<ul class="summary-list"><li><a target="_blank" href="https://www.businessinsider.com/tesla-ceo-elon-musk">Elon Musk</a> told staff on April 15 that Tesla planned to cut more than 10% of its workforce.</li><li>On Monday, Tesla staff entered their fourth straight week of layoff notices.</li></ul>Elon Musk is going through <a target="_blank" href="https://www.businessinsider.com/tesla-history-founders">Tesla</a> like a wrecking ball and heads are rolling left and right.In April, Musk turned his focus toward Tesla in a way some workers said they hadn't seen since he <a target="_blank" href="https://www.businessinsider.com/elon-musk-twitter-reach-agreement-to-close-acquisition-deal-2022-10">dropped $44 billion</a> on his Twitter purchase nearly two years ago — selling off a number of his Tesla shares in the process. On April 15, the Tesla CEO sent a late-night companywide email, notifying staff that the automaker planned to slash more than 10% of its workforce.Since Musk's announcement, the layoffs at Tesla have been ongoing. Several executives at the company have departed and Tesla workers say morale is flagging.Here's a rundown of what led to the layoffs and what's happened since Tesla kicked off the cuts.<h2 id="4932cc72-93e3-4b37-8bd6-384b57977d85">Tesla faces headwinds</h2>Ahead of the layoffs, <a target="_blank" href="https://www.businessinsider.com/tesla-sales-deliveries-q1-elon-musk-disappoint-fsd-2024-4">Tesla's delivery numbers slumped</a>, falling below Wall Street's estimates. Tesla deliveries in the first quarter fell 20% from the previous quarter and more than 8% from the same time the previous year, marking the company's first year-on-year sales decline since 2020.In a press release, Tesla blamed the decline in deliveries on its production ramp for its <a target="_blank" rel="" href="https://www.businessinsider.com/tech-youtuber-tesla-refreshed-model-3-mini-model-s-2024-2">refreshed Model 3</a>, an <a target="_blank" rel="" href="https://www.businessinsider.com/teslas-gigafactory-back-business-after-arson-attack-2024-3">arson attack</a> at its factory near Berlin, and supply-chain issues caused by the Red Sea conflict.Tesla and other automakers are grappling with <a target="_blank" rel="" href="https://www.businessinsider.com/electric-car-ev-sales-prices-problem-transportation-2024-1">slower demand</a> for their EVs. Musk had warned earlier in 2024 that the company was "between two major growth waves" as rising interest rates and economic uncertainty shake the market.At the same time, Tesla is battling to compete with electric car companies in China — the largest EV market in the world. Chinese company BYD even briefly overtook Tesla to <a target="_blank" rel="" href="https://www.businessinsider.com/china-byd-tesla-electric-car-ev-race-2023-11">become the world's top seller of electric vehicles </a>in January.More on the EV slowdown:<ul><li><a target="_blank" href="https://www.businessinsider.com/tesla-sales-miss-ev-slowdown-new-wave-customers-2024-4">Tesla can't outrun the EV slowdown</a></li><li><a target="_blank" href="https://www.businessinsider.com/tesla-challenges-amid-hybrid-craze-ford-gm-gas-profits-2024-4">GM and Ford's gas-powered profits and hybrid successes show how hard it will be for Tesla to weather an EV slowdown</a></li><li><a target="_blank" href="https://www.businessinsider.com/dealers-turning-away-evs-velectric-cars-demand-cools-inventory-2023-8">EVs are running out of customers — and some dealers don't want them anymore</a></li></ul><h2 id="8d03cd85-d4c2-4227-a593-a5367b53e4c3">The cuts commence</h2>Before Musk notified staff of the mass layoff, workers had been wary of impending cuts.In February, Bloomberg reported that the carmaker called for managers to begin <a target="_blank" rel="" href="https://www.businessinsider.com/tesla-managers-identify-key-roles-potential-layoffs-sign-report-2024-2">identifying the most vital roles</a> for the company. At the time, Tesla also delayed some workers' performance reviews, <a target="_blank" rel=" nofollow" href="https://www.bloomberg.com/news/articles/2024-02-07/tesla-stokes-layoff-fears-by-asking-whether-jobs-are-critical">Bloomberg reported</a>. The reviews were later rescheduled, three sources told BI.The day before the cuts kicked off, <a target="_blank" href="https://www.businessinsider.com/tesla-layoffs-employees-worry-2024-4">rumors circulated</a> within the company that the billionaire planned to eliminate as much as 20% of its workforce. Tesla workers hadn't seen such a deep cut since 2022 when <a target="_blank" href="https://www.businessinsider.com/tesla-layoffs#february-2023-5">Tesla slashed 10%</a> of its salaried staff.<div type="image" title="Elon Musk." height="2861" width="4292" msid="110034918" hostid="261" sizebytes="867346"></div>On April 15, the hammer fell when Musk announced the company was eliminating more than 10% of its employees.Musk said the layoff resulted from the "duplication of roles and job functions in certain areas.""There is nothing I hate more, but it must be done," Musk wrote, according to a <a target="_blank" href="https://www.businessinsider.com/elon-musk-sent-tesla-employees-email-announcing-layoffs-read-memo-2024-4">copy of the memo</a> that was viewed by Business Insider. "This will enable us to be lean, innovative and hungry for the next growth phase cycle."By the next day, hundreds of workers learned they'd been impacted by the cuts when they were locked out of Tesla's internal systems and received a "Dear Employee" memo to their personal email accounts. Other employees only learned they'd been laid off when their badge didn't work at a Tesla facility on Monday morning.During <a target="_blank" href="https://www.businessinsider.com/tesla-stock-tsla-quarterly-earnings-call-report-live-updates-2024-4#analyst-asks-what-sacrifices-tesla-is-making-with-recent-layoffs">Tesla's earnings</a> call on April 23, Musk said Tesla needs to reorganize for its next phase of growth."We're not giving up anything that significant that I'm aware of," Musk said during the call.More on Tesla's first week of layoffs:<ul><li><a target="_blank" href="https://www.businessinsider.com/tesla-exec-baglino-left-after-18-years-layoffs-2024-4">A major Tesla executive left after 18 years at the company amid mass layoffs</a></li><li><a target="_blank" href="https://www.businessinsider.com/tesla-factory-workers-discover-laid-off-security-badge-scans-sources-2024-4?mrfhud=true">Some Tesla factory workers realized they were laid off when security scanned their badges and sent them back on shuttles, sources say</a></li><li><a target="_blank" href="https://www.businessinsider.com/teslas-layoffs-arent-just-in-us-report-china-germany-2024-4">Tesla layoffs hit international offices</a></li><li><a target="_blank" href="https://www.businessinsider.com/tesla-layoffs-severance-agreement-pay-benefits-details-2024-4#:~:text=Tesla%20has%20begun%20sending%20severance,10%25%20of%20the%20company's%20workforce.">Tesla has begun sending out severance info to laid-off workers. Here's how much they're getting.</a></li><li><a target="_blank" href="https://www.businessinsider.com/elon-musk-tesla-apologizes-severance-packagaes-layoffs-2024-4">Elon Musk apologized for 'incorrectly low' Tesla severance packages</a></li><li><a target="_blank" href="https://www.businessinsider.com/tesla-cancels-some-layoff-separation-agreements-2024-4%5C">Tesla tells some laid-off employees their separation agreements are canceled and new ones are on the way</a></li><li><a target="_blank" href="https://www.businessinsider.com/tesla-gives-some-laid-off-employees-new-severance-offer-2024-4#:~:text=Tesla%20sent%20some%20laid%2Doff,than%2010%25%20of%20Tesla's%20workforce.">Tesla sends some laid-off workers new severance offers after Elon Musk said some were 'incorrectly low' the first time</a></li></ul><h2 id="085896f4-91cd-4941-a9c9-d73e86331c6f">Layoff notices continue to go out in waves</h2>After Tesla started notifying workers who had been laid off on April 16, they didn't stop. Later that week, the cuts hit Tesla's recruiting team. In the weeks that followed, Musk cut Tesla's US advertising team and reportedly chose to slash Tesla's entire Supercharging team, as well as its vehicle programs and new product introduction team.On May 6, workers at the company entered their fourth straight week of layoff notices as Tesla cut staff from teams that had been previously impacted in the first wave of layoff notices, five sources told BI.Amid the cuts, several <a target="_blank" href="https://www.businessinsider.com/tesla-executives-who-left-company-elon-musk-layoffs-2024-5">executives have taken leave of the company</a> — from Tesla's former senior director of human resources to its SVP of powertrain and electrical engineering. On Wednesday, Tesla's former head of new product launches said he'd chosen to resign because the layoffs had <a target="_blank" href="https://www.businessinsider.com/tesla-exec-rich-otto-says-resigned-layoffs-hurt-morale-2024-5">thrown the company "out of balance."</a><div type="image" title="tesla fremont factory" height="664" width="1024" msid="110034920" hostid="261" sizebytes="100346"></div>The resignations and cuts have further consolidated Musk's power at Tesla. The CEO now has 35 direct reports, according to The Information. He also chose to relocate Tesla's second-in-command Tom Zhu back to China.Meanwhile, as the cuts continue, workers say they're waiting for the billionaire to finally call a cease-fire."I keep waiting for Elon to send another email and tell us they're finally done firing people," one current Tesla worker, who requested anonymity to speak on the conditions of their employment, said. "We need some level of closure or a sign that we can stop worrying about losing our jobs."More on the ongoing layoffs:<ul><li><a target="_blank" href="https://www.businessinsider.com/tesla-layoffs-continue-recruiters-2024-4#:~:text=Tesla's%20layoffs%20week%20continues%20with%20recruiters%20the%20latest%20to%20lose%20their%20jobs&amp;text=Tesla%20told%20some%20of%20its,been%20laid%20off%20shortly%20after.">Tesla's layoffs week continues with recruiters the latest to lose their jobs</a></li><li><a target="_blank" href="https://www.businessinsider.com/teslas-layoffs-jobcuts-hit-austin-texas-workers-2024-4#:~:text=Tesla%20has%20laid%20off%202%2C688,other%20US%20and%20international%20locations.">Tesla layoffs impacted nearly 12% of its Texas staff</a></li><li><a target="_blank" href="https://www.businessinsider.com/teslas-workers-nervous-about-future-after-layoffs-2024-4">Tesla's chaotic layoffs leave employees nervous and wondering when the cuts will end</a></li><li><a target="_blank" href="https://www.businessinsider.com/more-tesla-layoffs-workers-post-2024-5">Tesla sends out another wave of layoff notices as employees enter 4th week of job cuts</a></li></ul>Do you work for Tesla or have a tip? Reach out to the reporter via a non-work email and device at gkay@businessinsider.com or via the secure-messaging app Signal at 248-894-6012

Inside Tesla's chaotic month of brutal layoffs

<ul class="summary-list"><li>Tesla is reportedly gutting its EV charging team, laying off around 500 employees.</li><li>The news sent shockwaves through the industry, with one supplier calling it a "kick in the pants."</li></ul><a target="_blank" href="https://www.businessinsider.com/elon-musk">Elon Musk</a> has gone "<a target="_blank" href="https://www.businessinsider.com/elon-musk-tesla-hardcore-layoffs-report-2024-4">hardcore</a>" again — and it's sending tremors through the EV industry.<a target="_blank" class="" href="https://affiliate.insider.com?h=35280143c94a2b9e9f1d35162307f10ba81170dfc3e328531a26b30b5231c5b6&amp;postID=663207301f5f5e2b5003d866&amp;postSlug=tesla-elon-musk-supercharger-layoffs-concern-confuse-suppliers-2024-5&amp;site=bi&amp;u=https%3A%2F%2Fwww.theinformation.com%2Farticles%2Fmusk-plans-more-layoffs-as-two-senior-tesla-executives-depart">The Information reported late Monday</a> that Musk is laying off around 500 employees on its Supercharger team in a move that one supplier has described as a "sharp kick in the pants." The team is responsible for building its global network of superfast EV chargers."As contractors for the Supercharger network, my team woke up to a sharp kick in the pants this morning," Andres Pinter, co-CEO of Bullet EV Charging Solutions, an Austin-based EV chargepoint installer that works on Tesla's network, <a target="_blank" href="https://www.reuters.com/business/autos-transportation/musk-disbands-tesla-ev-charging-team-leaving-customers-dark-2024-04-30/">told Reuters</a>."Tesla has already been awarded money under the federal government's NEVI program. There's no way Mr. Musk would walk away from effectively free money. It may be possible Mr. Musk will reconstitute the EV charger team in a bigger, badder, more Muskian way," he added.The shock job cuts have reverberated across the auto industry, with many of Tesla's rivals backing the company's charging network by making <a target="_blank" href="https://www.businessinsider.com/tesla-officially-won-the-charging-wars-nacs-sae-2023-12">their EVs compatible with Tesla's Superchargers in recent months.</a>Executives at EV startup Rivian, which recently said its drivers would be <a target="_blank" href="https://www.businessinsider.com/how-to-charge-non-tesla-ev-at-supercharger-models-adapters-2023-7#rivian-3">able to use Tesla's network</a>, were left confused and concerned by the job cuts, <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-04-30/tesla-axes-supercharger-team-in-blow-to-other-automakers">a source told Bloomberg</a>.Over the past few years, Tesla's North American Charging Standard (NACS) has become the dominant charging network in the US, with the company installing 15,000 Superfast charging stalls across the country as of 2024.<a target="_blank" href="https://www.businessinsider.com/how-teslas-charging-partnership-ford-and-gm-works-consumers-2023-6">Ford, General Motors</a>, and <a target="_blank" href="https://www.theverge.com/2024/2/12/24070654/stellantis-tesla-ev-charging-plus-nacs-adapter">Stellantis</a> announced they will make their EVs compatible with NACS in the past year.Business Insider approached Rivian, Ford, and GM for comment but didn't immediately hear back.In an email to senior executives at Tesla on Monday, Musk announced the departure of two executives: Rebecca Tinucci, senior director of the company's Supercharger group, and Daniel Ho, head of new products, per The Information. He also castigated executives for not being "hard core" enough in cutting headcount.Last month, Tesla <a target="_blank" href="https://www.businessinsider.com/tesla-layoffs-job-cuts-2024-2">laid off over 10% of its global workforce</a>.Tesla shares <a target="_blank" href="https://www.cnbc.com/2024/04/30/tesla-shares-drop-after-musk-cuts-about-500-jobs-in-supercharger-team.html#:~:text=Tesla%20shares%20fell%20nearly%206,down%2026%25%20for%20the%20year.">dropped early Tuesday</a> as investors reacted to the news. Musk, meanwhile, sought to reassure owners and suppliers by stating that Tesla still plans to grow its Supercharger network, just <a target="_blank" href="https://www.businessinsider.com/elon-musk-tesla-supercharging-network-grow-slower-pace-2024-4">at a slower pace than before</a>.However, there are signs that the company is cutting back on new Superchargers. The EV maker reportedly canceled four planned Supercharger sites in New York on Tuesday, according to <a target="_blank" href="https://insideevs.com/news/718045/nyc-tesla-supercharger-sites/">InsiderEVs</a>.William Navarro Jameson, who worked as Tesla's Charging Program Lead confirmed he was laid off in a post on LinkedIn.,He <a target="_blank" href="https://twitter.com/willjameson/status/1785304277889794536">wrote on X</a> that the layoffs offered a "unique opportunity" for others looking to challenge Tesla's charging stranglehold."If Tesla is yielding the charging crown, who will step up?" he said.Tesla did not immediately respond to a request for comment made outside normal working hours.

A Tesla supplier says Elon Musk's Supercharger layoffs were 'a sharp kick in the pants'

<ul class="summary-list"><li>GM employees have until March 24 to accept buyout offers.</li><li>Salaried employees with at least five years of experience qualify for the buyouts.</li></ul>General Motors is implementing a sweeping buyout program that covers a majority of its salaried workforce as the car company continues to cut costs to fund an electric future.Any salaried GM employee with at least five years of experience or executive with at least two years of experience at the car company qualifies for the voluntary buyout program, sent to employees in a letter Thursday. The buyout program is part of GM's plan to "accelerate attrition and achieve $2 billion in cost savings by the end of 2024," spokesperson Maria Raynal said in an emailed statement.Packages vary by job title and tenure. All US salaried employees with at least five years of experience are eligible for one month of pay for every year of service up to 12 months, as well as a pro-rated performance bonus and outplacement services, the spokesperson said. Eligible employees have until March 24 to accept the buyout offer, and once approved will leave the company by June 30."By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market," Raynal said.GM last rationalized its workforce in 2019, slashing about 15% of its North American salaried employees at the same time the company initiated plans to close several factories. Earlier this year, some experts wondered if GM and other car companies would outrun a larger trend of <a href="https://www.businessinsider.com/tech-layoffs-workers-jobs-careers-hiring-auto-industry-2023-1">layoffs hitting the tech sector</a> due to these actions. But as EV rollouts at the company stall, according to a report this week from <a href="https://www.wsj.com/articles/gms-ev-push-stalls-amid-slow-rollouts-for-gmc-hummer-cadillac-lyriq-8c0103bd?mod=hp_lead_pos4" target="_blank" rel="noopener">The Wall Street Journal</a>, it appears more downsizing is necessary.Other car companies have announced job cuts this year, including Rivian and Ford. But GM's is the largest so far, impacting a majority of its 81,000 white-collar workers around the world.

GM offers buyouts to most salaried employees, in a bleak warning for white-collar workers

<ul class="summary-list"><li>Henrik Fisker's second automotive startup <a target="_blank" href="https://www.businessinsider.com/fisker-automotive-files-for-bankruptcy-2024-5">filed for Chapter 11 bankruptcy</a> on Monday.</li><li>Fisker was pitched as a Tesla rival, but workers say mismanagement led to compounding problems.</li></ul><a target="_blank" href="https://www.businessinsider.com/fisker-ocean-range-360-mile-tesla-model-y-extreme-2023-6">Fisker's</a> staff was in chaos as they prepared to deliver the company's first batch of electric cars to US customers.It had been four years since famed automotive designer Henrik Fisker unveiled his Tesla rival, an SUV called the Ocean, and the vehicle still wasn't ready.In the weeks leading up to the big June 2023 event, Fisker staff raced to fix faulty parts on at least four of the 22 EVs that were set to be delivered — even stripping parts off the CEO and CFO's personal cars to repair the vehicles, including door handles and seat sensors, according to 11 sources familiar with the incident.Two days later, Fisker board member Wendy Gruel's Ocean SUV, one of the cars that had been delivered at the event, shut off on a public road while going full speed, five sources said. Later, the same thing happened to Geeta Gupta-Fisker, Henrik's wife and the company's CFO and COO, workers said.A Fisker spokesperson denied that workers used parts from pre-production vehicles for customer cars and said Gruel's car didn't stop on a public road. The company said Gupta-Fisker's vehicle had malfunctioned, but the issue was resolved.When <a target="_blank" href="https://techcrunch.com/2024/02/09/fisker-ocean-braking-power-loss-problems-investigation/">TechCrunch previously reported</a> the incident with Gruel's car, the publication said the company had confirmed the incident and said the issue was fixed.The issue was unrelated to <a target="_blank" href="https://www.businessinsider.com/fisker-fixing-some-evs-with-parts-from-inventory-vehicles-sources-2024-4">Fisker's part swapping</a>, but one thing was clear: the electric cars had barely hit the road and already the problems were piling up.Henrik Fisker's EV startup seemed to be an easy sell at first. The 60-year-old automotive veteran boasts a long history in the industry, known for being the designer behind the Aston Martin V8, the BMW Z8 roadster that famously appeared in a 1999 James Bond film, and helping design Tesla's Model S.Even though it was Henrik's second automotive startup after his first company went out of business in 2013, some workers told Business Insider that it was easy to dismiss worries early on that his second company could meet the same fate.For his part, Henrik said he <a target="_blank" href="https://www.wsj.com/articles/car-designer-henrik-fisker-lost-his-first-race-with-elon-musk-he-wants-to-go-again-11596811140?mod=article_inline">planned to do things differently</a> this time. He would follow Apple's model by outsourcing production through Magna International and he also aimed to target the middle of the market with a more affordable EV option that could compete with Tesla's best-selling Model Y. Fisker Inc emerged in 2016 and went public in 2020 via a SPAC backed by Apollo Global Management. At one point, the company's market value soared as high as $8 billion.At the time, Fisker was one of several EV startups to burst onto the scene — Rivian, Lucid, and Lordstown all wanted the chance to compete with Tesla. Since then, production and market headwinds have pushed some EV startups to shutter and major players like <a target="_blank" href="https://www.businessinsider.com/ford-cuts-production-of-f150-lightning-cybertruck-rival-ev-demand-2023-12">Ford</a> and GM to scale back their electric-vehicle operations. Even Tesla has struggled, seeing <a target="_blank" href="https://www.businessinsider.com/tesla-rough-year-sales-slump-layoffs-china-ev-competition-2024-4">revenue decline and layoffs.</a>"I was hopeful at first," one former VP, who worked at both Fisker startups, said. "Initially, at least, it seemed like he'd learned from his mistakes. It became obvious later on that they hadn't."A Fisker spokesperson said it would be "unfair" to compare the two companies.On Monday, the company announced it had filed for Chapter 11 bankruptcy after months of struggling to stay afloat. The company cited "various market and macroeconomic headwinds."Business Insider spoke with over two dozen current and former Fisker employees who worked at the startup during various periods from its launch in 2016 to the present. The workers, whose identities are known to BI, requested anonymity as they were not authorized to comment on Fisker's behalf and feared professional reprisal.<h2 id="e8954edd-4b73-4f38-85d2-814ed075f355">A husband and wife duo who workers say mismanaged their way into a mess</h2>Many of Fisker's woes can be traced back to the husband-wife duo that launched the brand, multiple former and current workers told BI.They described a disorganized environment in which unqualified people were brought in to lead major programs and basic automotive standards were ignored.While Henrik often served as a figurehead, Gupta-Fisker was heavily involved in everyday decisions, including on the engineering side, 11 workers said. Prior to taking on the role of CFO and COO at Fisker, Gupta-Fisker had served as an investment manager for the Fisker family office and as an advisor at a nonprofit. She had no prior experience in the automotive industry. But at Fisker, the workers said she managed deals with Magna and outside parts suppliers, frequently popped into engineering meetings, and weighed in on everything from parts purchases to software decisions.A spokesperson for Magna declined to comment on Fisker. A Fisker spokesperson denied comments that Henrik took on a more passive role and said he was "deeply involved."<div type="image" title="henrik fisker" height="798" width="1200" msid="110936369" hostid="261"></div>49-year-old Gupta-Fisker quickly became known in the company for her shrewd cost-cutting abilities. But, her strategy meant that at times Fisker ended up using components that didn't match the correct specifications for the Ocean, five former and current workers said. Gupta-Fisker made several decisions to use cheaper parts against Fisker executive and Magana executives' advice, two workers said. The mismatches led to issues with over-the-air updates, the five workers said.The company said Magna oversaw the majority of parts sourcing and a "significant" amount of the parts came from Magna and its suppliers.In conversations with BI, staff blamed many of the Ocean's faults on the cost-cutting efforts.Several workers said that in the months leading up to the vehicle's launch, they filed internal reports recommending that the product undergo further testing and development before its release. They said they were told the company planned to proceed anyway."The focus was on getting the car to market as soon as possible," one former worker said. "The overarching belief was we could fix things with updates later on."A Fisker spokesperson said Magna was responsible for testing and releasing the Ocean and it had been fully certified by regulators in the US and Europe. The company has been sending out over-the-air updates since 2023, the company said.Ahead of the release, Fisker engineers were aware of multiple issues with the vehicle, according to five current and former workers, as well as internal documents viewed by Business Insider. Engineers had identified issues with the effectiveness of the car's door handles, key fobs, and seat sensors.Over the past year, the National Highway Traffic Safety Administration (NHTSA) has launched four investigations into Fisker's SUV, including issues with inadvertent braking and flaws in the vehicle's door latch system. The company said it is cooperating with NHTSA.Fisker has also faced dozens of lemon law lawsuits. Last week, Fisker issued a recall for a software-related issue that it said caused some of its vehicles to suddenly lose power.<h2 id="8e98472b-4e09-47d7-bcfa-881e8d846bb4">Cutting corners led to compounding issues</h2>In its haste to bring the car to market, Fisker failed to set up an effective system for processing repair orders and warranty claims, seven current and former workers said. Technicians were tasked with filling out the work orders and many of them said they hadn't been trained on the process.In lieu of a working warranty system, some workers began processing the repairs without the proper California Bureau of Automotive Repair codes and EPA license numbers, using "123456" as a placeholder on a number of repairs, according to an internal document viewed by BI. In March, a VP at Fisker warned the issue made the company non-compliant with NHTSA protocols and unable to properly track and report safety concerns.A Fisker spokesperson said the issue was "an internal error with only draft work orders early in the service process that was immediately corrected."<div type="image" title="The Fisker Ocean electric SUV." height="2180" width="4000" msid="110936368" hostid="261"></div>Without a proper system to process warranties or repair orders, the majority of repairs went unaccounted for, seven current and former workers said. That meant there wasn't an adequate way for Fisker to keep track of which parts were being used for repairs for its own financial records. It also meant many customers did not get a record of their repairs, workers said.Meanwhile, Fisker also struggled to find the necessary parts for all of the fixes. The company hadn't set up much inventory for aftersales parts, so some of the parts used for customer fixes either came directly off the factory line, meaning they were meant for production vehicles, or the parts were stripped off pre-production and production vehicles, 11 workers with knowledge of the issue said.In one instance, Fisker stripped parts off an engineering test vehicle that had been shipped from Magna's facility in Graz, Austria under an import bond, according to three former workers and emails viewed by BI. The vehicle was supposed to be destroyed in its entirety shortly after it was delivered to comply with the terms of the import. This is typically within a year, according to NHTSA, but the period can be extended in one-year increments up to 3 years. The vehicle's parts were not intended to be used for customers' cars.The company denied any test vehicles had been used for parts and said all vehicles that had been imported for testing were destroyed under NHTSA's supervision within the allotted time period.The spokesperson also denied that Fisker had a shortage of after-sales parts: "The Service department made its own forecast for parts, based on their sector knowledge. The Purchasing department supported those requests."Fisker staff also looked for clever ways to address the parts shortage. In some instances, workers who visited Graz were told by managers to bring parts back in their suitcases to avoid paying import fees, seven workers said. One worker recalled having to leave personal belongings behind to fit air vents and key fobs into their luggage; another said they packed a larger bag to fit trim panels.Fisker declined to comment on the claims.<h2 id="e953bce8-39b3-440c-9715-39f271372785">A sales scramble amid negative reviews and vanishing demand</h2>Fisker was initially successful in generating interest in the Ocean, with over 65,000 reservations initially placed.But in the year since the Ocean's release, the company has delivered around 7,000 vehicles, a Fisker spokesperson said. Negative reviews — including YouTuber MKBHD calling it the <a target="_blank" href="https://www.businessinsider.com/mkbhd-fisker-ocean-review-marques-brownlee-video-tiktok-2024-3">"worst care I've ever reviewed"</a> — took a toll on the brand, driving thousands of would-be customers to <a target="_blank" href="https://www.businessinsider.com/fisker-ocean-reservation-cancellations-electric-car-leaked-data-2024-3">cancel their reservations.</a>In November, Fisker moved to bring in hiring recruiters to help sell the vehicle, as well as orchestrate the delivery of the car after the sale had been processed, six former workers said. In many cases, the recruiters, who had initially been brought onto the human resources team, had zero experience in automotive sales.A Fisker spokesperson said that recruiting staff did join the sales efforts, though the company said they were asked to stay because they were successful in the new role.<div type="image" title="Marques Brownlee reviewed the Fisker Ocean for a second time." height="936" width="1694" msid="110936373" hostid="261"></div>Selling the car wasn't easy either. The recruiters found themselves directly competing with the company's established sales team and there weren't enough leads to go around. Four former workers said Fisker's reservation numbers included many duplicate names in its count and it was difficult to track which customers had connected with a sales worker. As a result, some people on the reservation list would find themselves getting multiple calls per day from different Fisker representatives.At one point, sales workers were instructed to target customers who had canceled their orders and pepper them with calls in an attempt to get them to reverse their decision, three former workers said.Fisker also began hosting pop-up events to boost sales, including events in partnership with fan blog Fiskerati, two former employees told BI. The events varied from meetups at Panera parking lots to larger-scale test drive events. In at least one instance, the event was shut down after Fisker failed to get permission from the owner of the location, the two sources said. Queues of Fisker owners that needed repairs also showed up at the events, three former workers said. Fisker told BI that the event hosted at Panera was not a company event."Sometimes it was hard to sell the cars when you'd take someone on a test drive and any number of error messages would pop up," one former worker from sales said. "As time went on and it became clear the writing was on the wall, we became even more honest with the customers on the risk," they added.Fisker said it was aware of the ADAS issues but it was fixed with an update.Meanwhile, some customers who'd canceled their orders and never paid for the car ended up mistakenly receiving delivery of the vehicle anyway, four former workers said. Former Fisker Ocean owner Kurt Mechling told BI he received delivery of the vehicle before he'd signed off on the order or had his payment successfully processed.In March, <a target="_blank" href="https://techcrunch.com/2024/03/27/fisker-misplaced-payments-internal-audit-bankruptcy/#:~:text=Fisker%20lost%20track%20of%20millions%20of%20dollars%20in%20customer%20payments%20for%20months,-Sean%20O'Kane&amp;text=Fisker%20temporarily%20lost%20track%20of,to%20complete%2C%20TechCrunch%20has%20learned.">TechCrunch reported</a> that Fisker temporarily "lost track of millions of dollars in customer payments" for multiple months. Four workers with knowledge of the issue confirmed to BI the incident involving misplaced payments occurred.When the carmaker conducted an internal audit in December over the issue, workers began scrambling to find the missing payments and bring some of the vehicles that had been mistakenly delivered back, the workers said. Some workers were encouraged by upper management to threaten the customers by saying they'd put them on a repossession list which could impact their credit score, the former workers said.A Fisker spokesperson said the company had an "organized process" to address issues with vehicles that had not been paid for that was in line with industry standards.<h2 id="2d075735-437a-44c8-8b3a-477539207853">Filing for bankruptcy — again</h2>Fisker had been facing the possibility of bankruptcy for months.Fisker warned in March that it might go out of business within the year. The stock was delisted from the New York Stock Exchange in April after it fell to 9 cents per share.Fisker <a target="_blank" href="https://www.businessinsider.com/fisker-sends-employees-possible-layoff-notice-2-months-2024-4">warned</a> staff in an April filing that they could be laid off if the company couldn't find a buyer or additional investor. The company brought in a chief restructuring officer who was given "sole authority" over some financial matters, including a potential sale, as part of an agreement with one of its investors.Fisker also dropped prices by as much as $24,000 for some versions of the vehicle and conducted a series of layoffs that whittled the company down to the bone.Ahead of the bankruptcy filing, Fisker's workforce consisted of less than 100 people, according to two sources with knowledge of the issue. The remaining workers were involved in last-ditch efforts to offload the company's remaining inventory, the people said.A week before the bankruptcy filing, Fisker denied it had less than 100 workers left and told BI it continues to sell vehicles in the US and in Europe. It declined to specify how many workers remained.In its Chapter 11 filing, Fisker said that its manufacturing pause would remain in place but that it plans to file "customary motions" with the bankruptcy court to ensure it can continue to pay employee wages and its vendors.Over the past few months, workers have expressed dissatisfaction with what they view as Henrik and Gupta-Fisker's inability to <a target="_blank" href="https://www.businessinsider.com/fisker-ceo-all-hands-meeting-announcing-layoffs-2024-5">take accountability</a> for their actions. A Fisker spokesperson pushed back on the comments questioning Henrik's business prowess.For Henrik, whose earlier company, Fisker Automotive, filed for bankruptcy in 2013, his present predicament echoes the past."I think it's a story of ego. He wanted to make a car and stamp his name on it. Henrik is a great designer, but he doesn't have the business acumen beyond that," an individual who worked with Henrik at several companies, including his first automotive startup. "The lessons he should have learned from the first startup were never implemented and he rushed a car to market once again."June 18, 2024: Updated to reflect that Fisker filed for Chapter 11 bankruptcy.June 12, 2024: Added clarification that NHTSA requires temporarily imported vehicles to be destroyed within 3 years and that Fisker said it had done so within the allotted time period.Do you work for an EV company like Fisker or Tesla? Reach out to the reporter from a non-work email and device at gkay@businessinsider.com or 248-894-6012.

Inside the downfall of Henrik Fisker's second automotive startup, which just filed for bankruptcy

<ul class="summary-list"><li>Stellantis is offering thousands of employees buyout packages, The Wall Street Journal reported.</li><li>The move comes weeks after crosstown rival General Motors offered employees buyouts.</li></ul>A new round of buyouts is hitting the legacy auto industry.Stellantis — which owns brands like Jeep, Chrysler, Dodge, and Ram — is offering thousands of salaried and hourly workers voluntary separation packages, The Wall Street Journal <a href="https://www.wsj.com/articles/jeep-maker-stellantis-to-offer-buyouts-to-hourly-salaried-workers-d3c71fdc?mod=pls_whats_news_us_business_f">reported Wednesday</a>, citing an internal company email sent from Mark Stewart, the company's North American chief operating officer. The salaried employees getting the offers have 15 or more years of experience, according to the Journal.In the memo, Stewart attributed the move to the EV transition, writing, "The competition is fierce, and the cost of electrification cannot be passed on to the customer," The Wall Street Journal reported. Stellantis, which was formed out of the merger of the French PSA Group and Fiat Chrysler, is investing at least $35 billion dollars into EVs and plans to sell 25 all-electric cars in the US by 2030.The buyouts will be offered to 31,000 hourly employees and 2,500 salaried workers in the U.S, though others could be impacted in Canada, a spokesperson told the Journal. Stellantis last offered buyouts to salaried US employees last fall. "In response to today's increasingly competitive global market conditions and the necessary shift to electrification, Stellantis is thoroughly reviewing its North American operations to improve efficiency, reduce costs and protect the competitiveness of our products to allow for further strategic investments to support our transformation," a Stellantis spokesperson told Insider via email. "These voluntary programs are being offered to provide a favorable option to employees looking to pursue new opportunities, while preserving critical roles the Company needs in order to maintain its competitive advantage." <h2>EVs are squeezing automakers hard</h2>Amid the volatile economic climate, layoffs and buyouts have been hitting many industries hard, especially tech. But the impact of inflationary pressures and high interest rates has also hit incumbent automakers.Pressure to cut costs is rising as car companies bet their futures on EVs, which haven't yet yielded substantial profits.Stellantis' move comes not long after its crosstown rival GM offered a <a href="https://www.businessinsider.com/gm-buyouts-salaried-employees-layoffs-savings-effort-white-collar-2023-3">sweeping buyout program to a majority of its salaried workforce</a>, an effort to save $2 billion by the end of 2024. GM later said about 5,000 workers accepted the offer. Ford, meanwhile, already cut about 3,000 workers last summer amid the company's reorganizing of its gas-powered and electric vehicle businesses, and has signaled more could come.Stellantis CEO Carlos Tavares has long been <a href="https://www.businessinsider.com/stellantis-jeep-ceo-world-doesnt-have-enough-raw-materials-electric-car-batteries-2023-3">vocal about headwinds facing the global transition to EVs</a> in terms of cost and materials needed.

Jeep-maker Stellantis is offering buyouts to some of its most senior employees — and blaming it on EVs

If only Boeing’s problems were just about a nightmare flight — a screw loose, a blown-out door plug, and 177 people who will probably need therapy for the rest of their lives. But as the iconic American plane manufacturer tries to make amends for the disastrous Alaska Airlines flight in January, it’s become clear that Boeing’s problems run far deeper. They expose decades of American corporate philosophy gone awry. Boeing is a quintessential example of America’s rotting business culture over the past 40 years. The company relentlessly disgorged cash to shareholders when it could’ve spent it on building a better (and safer) product. Investments that could’ve benefited employees, communities, and other corporate stakeholders were often sacrificed at the altar of efficiency and free cash flow. Boeing focused on pleasing Wall Street because that’s how American executives believe companies should operate.“The people who are at the top are there for a reason, and it’s basically to maximize shareholder value,” the University of Massachusetts economist William Lazonick told me. “It’s so ingrained in their thinking they don’t understand the problem itself. It’s built into the structure of these companies.”Simply changing CEOs or hiring more engineers won’t make Boeing’s problems go away. The company needs to rethink its very reason for existing and what it should provide to society as an enterprise. A good American company isn’t just a vehicle for financial returns; it is first and foremost an employer, a contributor to economic and/or technological innovation, and a source of US power. Whether the recent disasters shake Boeing out of its somnambulance remains unclear. It’s also questionable whether other major companies with a similar maximize-shareholder-value-at-all-costs ethos will learn from the mistakes. But it’s clear that what Boeing — and the entire American corporate body politic — needs is nothing short of a philosophical counterrevolution. There was a time when pilots had stickers on their bags that said, “If it ain’t Boeing, I ain’t going.” Founded in 1916, the manufacturer helped the US launch NASA and win World War II. For decades it was the pinnacle of American engineering. “Boeing was America’s crown jewel,” William McGee, a journalist, advocate, and aviation-industry old hand, told me. “It was one of the most important and impressive companies in the US.”This started to change in the late 1980s when T.A. Wilson, the last Boeing CEO with an engineering background, was replaced by Frank Shrontz, an attorney and businessman. The choice was a signal to Wall Street that engineering excesses would be curbed in favor of cost discipline and investor rewards. Lazonick’s research indicates that from 1998 to 2018, Boeing did $61 billion worth of share buybacks to pump its stock price and paid out $29.3 billion in dividends. Over these three decades of plenty for Boeing’s shareholders, the company’s staff was asked to penny-pinch. An investigation into battery fires on Boeing’s 787 Dreamliner in 2013 found that it wasn’t allowing engineers to stress test its products enough, that it wasn’t catching manufacturing defects, and that passengers could be in danger as a result. But he finance guys loved Boeing’s new focus, and the C-suite — which receives the lion's share of its compensation in stock — loved it too. In the first quarter of 2019, Boeing announced a $2.7 billion stock buyback, and the market rewarded the company with an all-time-high share price of $426.76. But later that year, it all fell apart. The 737 Max 8 was supposed to be the most efficient, cost-effective, environmentally friendly narrowbody on the market. Instead, the plane exposed the rot at the core of the company’s culture. In his book “Flying Blind: The 737 Max Tragedy and the Fall of Boeing,” the journalist Peter Robison wrote that when the new model was being built, managers asked for a detailed accounting of every test flight and talked frequently about how any change had to “buy its way onto the airplane.” A manager lamented to one of Robison’s sources that people would “have to die” before Boeing made changes to the aircraft. And so they did: Two crashes — which were the result of the company’s attempt to work around a technical failure — claimed the lives of more than 300 people and grounded the 737 Max 8 for about 20 months. Boeing’s stock cratered, and <a target="_blank" href="https://www.businessinsider.com/airbus-set-to-break-order-records-beat-boeing-fifth-year-in-a-row-2023-12">France’s Airbus</a>, a rival once colloquially known as “Scare Bus,” started to <a target="_blank" href="https://www.businessinsider.com/airbus-struggling-outsider-beating-boeing-737-max-a320neo-2024-1">eat the American company’s lunch</a>. Executives promised to fix the problems that plagued the 737 Max 8, but the recent Alaska Airlines Max 9 mess has returned the focus to Boeing’s communication, supply chain, and overall quality-control failures. In Boeing’s quarterly earnings call at the end of January, President and CEO Dave Calhoun (who was hired after the previous 737 Max disaster) promised more of a focus on quality and encouraged employees to speak up about issues on the factory floor. “Since day one, we’ve been focused on inculcating safety and quality to everything that we do,” he said, “and getting back to our legacy of getting engineering excellence back at the center of our business.”To many talking-head Wall Street analysts and TV stock influencers, Calhoun’s comments were enough. Sure, this is a rough period for the company, but Boeing would be fine. Buy the dip. Others in the aviation industry aren’t so sure. United Airlines CEO Scott Kirby, one of Boeing’s customers, called the Max 9 fiasco “the straw that broke the camel’s back.” He expressed frustration at Boeing’s seemingly constant blunders and its nearly five-year delay in the delivery of the Max 10 (which hasn’t been certified by the Federal Aviation Administration). “We’re going to at least build a plan that doesn’t have the Max 10 in it,” he told CNBC. Rather than a blip on the radar, this should be a come-to-Jesus moment for Boeing — a moment when it puts engineering back at the center of its culture. Some have argued that Boeing’s problems go back further and are bigger than the recent quality issues. But the problems are the result of something even bigger than Boeing. The transition from an obsession with engineering to an obsession with financial engineering at Boeing, Lazonick told me, wasn’t just the case of one company suddenly changing strategy; it “reflected what was going on in the US.”Until the 1970s, he says, corporations were generally considered parts of a community with responsibilities to a plethora of stakeholders: the employees who work for them, the communities that house them, the customers who pay for their products.But then the US stock market flatlined, and the economy was in the doldrums, so Wall Street and Washington decided that the way American companies did business needed a shake-up. This wasn’t a simple tweak around the edges — refining regulations and adding a few new roles to executive teams — it was about an ideological full-court press to change American corporate culture.At the root of this shake-up was the influence of the economist Milton Friedman of the University of Chicago. In Friedman’s view, humans are selfish and look out for their own interests by nature. He argued that meant a company would see its social responsibility as being to its shareholders and its shareholders alone. One of Friedman’s disciples, the economist Michael Jensen, took the theory a step further in 1976 and argued that the corporation should be built to serve the interests of shareholders. Soon the two economists’ ideas were finding acolytes at business schools, think tanks, and congressional offices around the country. Jensen in particular pushed for CEOs to be paid in stock, arguing that they were being paid like bureaucrats and needed their compensation to be more in line with performance. This incentivized CEOs to maximize profits for shareholders. It’s probably no surprise that CEO pay increased by 1,322% from 1978 to 2020.The ideas also started to permeate Washington. Rule changes had allowed companies to repurchase their own shares, a practice that was previously considered stock manipulation and a general waste of capital that should be reinvested in the company. It also opened the door for Wall Street’s corporate raiders to pressure management to buy back stock to juice the price. Money that could have been spent investing in workers or products instead went straight to investors. By the 1990s, nary a thought was given to whether efficiency was enough of a reason to send jobs overseas. There was no time for that while politicians were busy talking about how America should be <a target="_blank" href="https://www.theatlantic.com/magazine/archive/2002/10/the-roaring-nineties/302604/">run as a business</a>.The CEO who best personified this ideology was Jack Welch, who helmed General Electric from 1981 to 2001. During his tenure, he was celebrated as one of America’s great CEOs for putting shareholder primacy into practice. He sliced costs for the things that had made the company innovative — like research, development, and quality control — and siphoned them off to shareholders in the form of buybacks and dividend payments. Wall Street rewarded his mentality richly, GE’s stock peaked at $318.26 in 2000, and Welch’s disciples at GE spread out all over corporate America. But a corporation can run on past innovation only for so long. In 2018, after over 100 years of prestige, GE was dropped from the Dow Jones Industrial Average because of the work Welch did to hollow it out. During the first few years of his tenure he fired a quarter of the company and continued to fire 10% of the workforce annually thereafter. He was such a fan of sending factories abroad — to American unions’ ire — that he infamously said, ''Ideally, you'd have every plant you own on a barge.'' GE was stripped to free up cash for shareholders time and time again — one of those, of course, being Welch. Even after he left the company, his pay package was so avaricious that the Securities and Exchange Commission fined GE in 2004 for failing to disclose its magnitude. The problem with playing Wall Street’s game is that you have to keep playing forever, and the efficiency doctrine has diminishing returns.“The ones where the most value is being extracted are the ones that were the most innovative in the past,” Lazonick told me, “but then they go into decline.” <a target="_blank" href="https://www.businessinsider.com/how-baby-boomers-became-the-most-selfish-generation-2016-11">An entire generation</a> of politicians and executives preached the doctrine of efficiency in the name of maximizing profits for shareholders, and we’ve seen the results: stagnant wages, massive inequality, legislators captured by industry lobbyists, and companies that coast on past innovation and financialization because it’s easier than investing in something new.As Boeing has been forced to reckon with the corporate culture it developed over the past 40 years, corporate America has been forced to face the long-term cost of its obsession with shareholder primacy and efficiency. We’ve lost a sense of balancing stakeholder interests. Not every company is as rich as, for example, Meta, which has been able to invest $50 billion in Reality Labs (the “metaverse”) since 2020 and still buy <a target="_blank" href="https://www.businessinsider.com/meta-zuckerberg-dividend-stock-buyback-growth-shareholder-returns-buffett-berkshire-2024-2">back its own stock at its highs</a>. Meanwhile, Deutsche Bank has projected that across the S&amp;P 500 buybacks will surge to $1 trillion in 2024. Surely not all of these companies occupy the same reality — virtual, financial, or otherwise. Besides, part of Wall Street’s good vibes for Meta stem from the fact that the company has <a target="_blank" href="https://www.businessinsider.com/meta-layoffs-office-closures-stock-price-mark-zuckerberg-earnings-2024-2">cut 22% of its workforce</a> over the past year. In an economy where taxpayers kept some businesses afloat through the pandemic, widespread layoffs in the name of efficiency and shareholder value will hit a nerve that has been irritated for years now. Americans — whether they’re shareholders are not — have started to notice their contributions to the corporations as workers and taxpayers are being taken for granted, and they’re naturally angry. The populism that has taken over our political discourse is anger over inequality harnessed for political action. In response, executives have offered only lip service. In 2019, the Business Roundtable, an advocacy group formed in the 1970s for corporations, read the populist <a target="_blank" href="https://www.wsj.com/articles/how-short-termism-saps-the-economy-1475018087">tea leaves</a> and published a <a target="_blank" href="https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans">statement</a> that said the purpose of a corporation was to serve all stakeholders, “<a target="_blank" href="https://opportunity.businessroundtable.org/ourcommitment/">customers, employees, suppliers, communities and shareholders</a>.” The problem is it’s hard to see how corporate behavior has actually changed since then. Look at General Motors. Right now, the company is trying to keep up in a global race to electrify the car industry. If there was any time to focus on productive investments over shareholders’ wallets, this would be it. When the United Auto Workers union went on strike in September, CEO Mary Barra <a target="_blank" href="https://www.ineteconomics.org/perspectives/blog/how-gms-10-billion-buyback-may-ice-its-ev-transition">warned workers</a> that it would cost the company money that should be invested in that transition. But in November, after the strike, she announced a $10 billion stock buyback, the company's largest share-repurchase plan and a larger sum <a target="_blank" href="https://www.reuters.com/business/autos-transportation/gm-buy-back-10-billion-shares-cut-cruise-spending-2023-11-29/">than it gave its workers</a>. The size of the buybacks is even more staggering when you consider that the company promised to spend $35 billion total on developing EVs from 2020 to 2025. Companies like GM and Boeing are crucial to the American economy. Their success keeps people employed and enriches communities, which is good for society. Maintaining and growing these iconic companies is a long-term business, but the people who run the business are motivated to play a short-term game.“Boeing is vital, but we don’t treat it like it’s vital,” McGee said. “We treat it like a casino.”There are ways to change all of this, as Lazonick outlines in his 2023 book “Investing in Innovation.” Companies could decouple executive pay from stock prices or change the composition of boards to include employees. But more fundamentally, it will take a total rethink of America’s corporate incentive structure. Instead of favoring shareholders and playing a quarterly game with Wall Street, C-suites should prioritize sustainable, long-term businesses that employ as many productive workers as possible. This means companies won’t suddenly fall out of the sky when the economy sours or their products start to give way for lack of investment. In Boeing’s case, that could mean bringing suppliers closer to home, investing in more layers of quality control, and allowing more time for testing and research. It could mean a more expensive, more redundant company, but a better one. The first step is believing that the state of Boeing is not a natural one — that it can be changed with conscious effort. We just have to choose a better way.<a target="_blank" rel="" href="https://www.businessinsider.com/author/linette-lopez">Linette Lopez</a> is a senior correspondent at Business Insider.

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