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Wednesday 18 September 2019

GM to slash up to 14,000 jobs in North America

Most of the affected factories build cars that will not be sold in the US after next year.

A worker checks the paint on a Camaro at the GM factory in Oshawa, Ontario (Frank Gunn/The Canadian Press via AP)
A worker checks the paint on a Camaro at the GM factory in Oshawa, Ontario (Frank Gunn/The Canadian Press via AP)

By Tom Krisher and Rob Gillies, Associated Press

General Motors will lay off up to 14,000 workers in North America and put five plants up for possible closure as it restructures to cut costs and focus more on autonomous and electric vehicles.

The reduction includes 8,100 white-collar workers, some of whom will take buyouts and others who will be laid off.

Most of the affected factories build cars that will not be sold in the US after next year. They could close or get different vehicles to build.

They will be part of contract talks with the United Auto Workers union next year.

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A worker leaves Oshawa’s General Motors plant (Eduardo Lima/The Canadian Press via AP)

The salaried reductions amount to 15% of GM’s North American workforce out of 54,000.

At the factories, around 3,300 blue-collar workers could lose jobs in the US and another 2,600 in Canada.

Some US workers would transfer to truck and SUV plants where GM is increasing output, the company said.

Donald Trump said his administration and legislators are exerting “a lot of pressure” on GM.

The president said he told the company the US has done a lot for GM and that if its cars aren’t selling, the company needs to produce ones that will.

GM, which is the largest carmaker in the US and includes the Chevrolet, Buick, Cadillac and GMC brands, said the moves will save six billion dollars (£4.68 billion) in cash by the end of next year, including 4.5 billion dollars (£3.5 billion) in recurring annual cost reductions and a 1.5 billion dollar (£1.17 billion) reduction in capital spending.

Those cuts are in addition to 6.5 billion dollars that the company has announced by the end of this year.

GM does not foresee an economic downturn and is making the cuts “to get in front of it while the company is strong and while the economy is strong”, chief executive Mary Barra told reporters.

Ms Barra said GM is still hiring people with expertise in software and electric and autonomous vehicles, and many of those who will lose their jobs are now working on conventional cars with internal combustion engines.

She said the industry is changing rapidly and moving towards electric propulsion, autonomous vehicles and ride-sharing, and GM must adjust with it.

The company, Ms Barra said, has invested in newer architectures for trucks and SUVs so it can cut capital spending while still raising investment in autonomous and electric vehicles.

GM has offered buyouts to 18,000 retirement-eligible workers with a dozen or more years of service.

It would not say how many have accepted the buyouts, but it was short of the company’s target because GM said there will be white-collar layoffs.

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General Motors is closing the Oshawa plant (Eduardo Lima/The Canadian Press via AP)

The company expects to take a pre-tax charge of three billion dollars to 3.8 billion dollars due to the actions, including up to 1.8 billion dollars of asset writedowns and pension charges.

The charges will take place in the fourth quarter of 2018 and the first quarter of next year.

The factories up for closure are part of GM’s effort “to right-size our capacity for the realities of the marketplace”, as consumers shift away from cars to trucks and SUVs, Ms Barra said.

Among the possibilities are the Detroit/Hamtramck assembly plant, which makes the Buick LaCrosse, Chevrolet Volt, Cadillac CT6 and Chevrolet Impala, all slow-selling cars.

LaCrosse and Volt production will end on March 1, while CT6 and Impala production would stop on June 1.

The plant in Lordstown, Ohio, which makes the Chevrolet Cruze compact car is also on the list, and Ms Barra said the Cruze would no longer be sold in the US. Production would stop on March 1.

Work on six-speed transmissions made at the Warren, Michigan, transmission plant would stop on August 1, while the Baltimore transmission plant would stop production on April 1, GM said.

Meanwhile, GM’s plant in Oshawa, Ontario, will stop making the Impala, Cadillac XTS and 2018 full-size pickups in the fourth quarter of next year.

Ms Barra said tariffs on imported aluminium and steel have hit the company, but she stopped short of saying they had anything to do with the restructuring.

PA Media

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