GM to lay off up to 14K workers, close as many as 5 plants


Associated Press

DETROIT

General Motors will cut up to 14,000 workers in North America and put five plants up for possible closure as it abandons many of its car models and restructures to focus more on autonomous and electric vehicles, the automaker announced Monday.

The reductions could amount to as much as 8 percent of GM’s global workforce of 180,000 employees.

The restructuring reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. In October, almost 65 percent of new vehicles sold in the U.S. were trucks or SUVs. That figure was about 50 percent cars just five years ago.

GM is shedding cars largely because it doesn’t make money on them, Citi analyst Itay Michaeli wrote in a note to investors.

“We estimate sedans operate at a significant loss, hence the need for classic restructuring,” he wrote.

Hours after the announcement, President Donald Trump said his administration and lawmakers were exerting “a lot of pressure” on GM. He said he told the company that the U.S. has done a lot for GM and that if its cars aren’t selling, the company needs to produce ones that will.

Trump, who has made bringing back auto jobs a big part of his appeal to Ohio and other Great Lakes states that are crucial to his re-election, also said he was being tough on General Motors CEO Mary Barra.

At a rally near GM’s Lordstown plant last summer, Trump told people not to sell their homes because the jobs are “all coming back.”

The layoffs come amid the backdrop of a trade war between the U.S., China and Europe that likely will lead to higher prices for imported vehicles and those exported from the U.S. Barra said the company faces challenges from tariffs but she did not directly link the layoffs to them.

The planned reduction includes about 8,000 white-collar employees, or 15 percent of GM’s North American white-collar workforce. Some will take buyouts while others will be laid off.

At the factories, around 3,300 blue-collar workers could lose jobs in the U.S. and another 2,600 in Canada, but some U.S. workers could transfer to truck or SUV factories that are increasing production. The cuts mark GM’s first major downsizing since shedding thousands of jobs in the Great Recession.

The company also said it will stop operating two additional factories outside North America by the end of next year, in addition to a previously announced plant closure in Gunsan, South Korea.

General Motors Co.’s pre-emptive strike to get leaner before the next downturn likely will be followed by Ford Motor Co., which has said it is restructuring and will lay off an unspecified number of white-collar workers. Toyota Motor Corp. also has discussed cutting costs, even though it’s building a new assembly plant in Alabama.

Barra told reporters that GM doesn’t 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.”

Factories that could be closed include assembly plants in Detroit and Oshawa, Ontario, and Lordstown, as well as transmission plants in Warren, Mich., and near Baltimore.

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