In a restructuring move aimed at cutting costs, General Motors has announced it will lay off close to 14,700 white-collar and factory workers in North America. The company will also halt production in five plants in the region by the end of next year.
Further, the automaker said it will kill several models that are not selling well, including the Cadillac CT6, Chevrolet Cruze, and the Buick LaCrosse as it shifts its focus on making electric and autonomous vehicles.
Some of the plants that are set to be affected include Oshawa, Ontario, that produces the Chevrolet Impala; the Hamtramck, Michigan plant, which makes Cadillac CT6, Buick LaCrosse, and Chevrolet Volt; and Lordstown, Ohio plant, where Chevrolet Cruze compacts are made.
The company also plans to kill operations at transmission plants in Warren, Michigan, and Baltimore, Maryland. GM follows Ford Motor which made similar job-cutting moves amid a shift in consumer preferences, driven in part by low gas prices and slowing US sales.
General Motors believes the restructuring plan will help it to save about $6 billion. “The actions we are taking today continue our transformation to be highly agile, resilient and profitable while giving us the flexibility to invest in the future. We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success,” said Chairman and Chief Executive Mary Barra in a conference call.
GM was already facing protests in Canada over the weekend from autoworker unions as word of the layoffs surfaced. Workers marched against the company by walking out of the Oshawa plant, clad in ponchos bearing the union’s logo, while waving red flags.
Ohio Sen. Rob Portman (R) also criticized the company saying, “I am deeply frustrated with General Motors’ decision to shut down its Lordstown plant and disappointed with how the hardworking employees there have been treated throughout this process.”
Early in his term, President Donald Trump piled pressure on the U.S. auto industry asking them not to move jobs overseas. However, the tariffs that he initiated earlier this year on Chinese steel and aluminum appear to be hurting the entire industry by disrupting the supply chain.
GM slashed its earnings full-year guidance in June saying the tariffs were driving up its costs. Although the company does not import much steel into the US, local steel suppliers have hiked prices to take advantage of the high demand.
GM stock gained more than 5.5% in late trading on Monday, moving at $37.98. The only time the automaker’s stock surpassed the $33 a share mark was back in 2010 after its initial public offer.
General Motors Profile
General Motors Co. engages in the designing, manufacturing, and selling of cars, trucks, and automobile parts. It also provides automotive financing services through General Motors Financial Company, Inc. The firm operates through the following segments: GM North America, GM International, and GM Financial.
It sells vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang, Wuling, Maven, and OnStar brands. The company was founded by William C. Durant on September 16, 1908 and is headquartered in Detroit, MI. – CNN Money