On 23 September, General Motors told employees that they are to be in their corporate offices at least three days a week beginning later this year.

The company called the change an “evolution” of its policy regarding remote work.

Four days later, after workers had complained, GM “clarified” its message to say that there would be no strict timetable for the return as of now and that GM would not mandate which days workers had to show up.

In April 2021, the carmaker was lauded for its “work appropriately” policy that gave workers flexibility in their worksites, depending on their projects and timetables.

In its 27 September follow-up, GM explained that “while we have maintained a highly collaborative culture over the last two years…the intangible benefits of in-person collaboration are going to be a critical success factor as we move into a period of rapid launches.

“This evolution is about being ready for the next phase of our transformation,” the message to employees said.

The statement also apologized for the original message’s vagueness. 

“We believe the benefits of being transparent—even with suboptimal timing and partial details—outweighed the risk of creating distrust by having you hear the information second-hand,” it said.

TREND FORECAST: As we had forecast, the work-at-home trend is here to stay and workers’ insistence for flexible working arrangements will withstand employers’ insistence about regathering centrally.

As a result, corporations will bow to the inevitable and eventually will reduce the amount of office space they own even more.

As those spaces flood the market—whether as space for lease in corporate buildings or entire buildings for sale—the glut of unoccupied office space begging for tenants or buyers will worsen.

As we have noted in our “Real Estate Industry Update” of 13 April, 2021, Fitch Ratings has calculated that allowing the nation’s office workers to spend a day and a half at home each week would reduce office space needs enough to cut landlords’ profits 15 percent; three days a week would slash 30 percent from profits, Fitch said.

We repeat our forecast of a business office real estate collapse and the negative implications it will have on businesses that depend on commuter traffic. (See “LABOR DAY: FALSE HOPES OF COMMUTER ECONOMY,” (27 Jul 2021); “COMMERCIAL REAL ESTATE BUST? OFFICE OCCUPANCY RATES IN TOILET” (29 Mar 2022); “NEW YORK OFFICE WORKERS EXPECTED TO SLASH CITY SPENDING BY HALF” (5 Apr 2022); “MASS EXPIRATION OF OFFICE LEASES THREATEN LANDLORDS” (26 Apr 2022).

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