General Motors will lay off 14,700 factory and white-collar 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.
GM said on Monday that it will close two plants in metro Detroit as well as plants in Ohio and Canada.
In a press statement, the company said it will close the Detroit-Hamtramck Assembly Plant in Detroit and Warren Transmission Operations in Warren.
Other plants closing include the Oshawa Assembly Plant in Oshawa, Ontario, the Lordstown Assembly in Warren, Ohio, and the Baltimore Operations in White Marsh, Maryland.
‘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,’ said GM Chairman and CEO Mary Barra.
‘We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.’
GM will lay off 14,700 factory and white-collar 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. One of those closures would be the Oshawa plant in Canada (pictured)
About 6,000 factory workers (pictured at the Oshawa plant) could lose jobs in the US and Canada, although some could transfer to truck plants. The plan will help save the company $6 billion by 2020, according to GM
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 won’t be sold in the US after next year.
They could close or they could get different vehicles to build. They will be part of contract talks with the United Auto Workers union next year.
About 6,000 factory workers could lose jobs in the US and Canada, although some could transfer to truck plants.
The plan will help save the company $6 billion by 2020, according to GM.
The Monday closure of GM’s plant in Oshawa, Ontario, was confirmed late Sunday by an official familiar with the decision.
GM opened its factory in Oshawa, near Toronto, in 1953. The plant is used to make the Cadillac XTS and Chevrolet Impala sedans as well as the Chevrolet Silverado and GMC Sierra trucks.
The company has three other sites in the province of Ontario. It is unclear whether they will also be affected
GM needs to reshape the company as it shifts its focus to lower emitting hybrid vehicles, technology that is not at the forefront at the Canadian plant.
In a press statement, GM officials announced the closure of Lordstown Assembly (pictured) in Warren, Ohio
The company will also close the Detroit-Hamtramck Assembly Plant (pictured) in Detroit
Too many GM factories are devoted to making slow-selling cars and the company can no longer afford to keep them all operating without making some tough decisions. But the political atmosphere might limit realistic choices for the Detroit automaker.
The company said that the moves will help continue its focus on crossovers, SUVs and trucks.
With the move, GM plans to cut 25 per cent of the executive staff and 15 per cent of the salaried and salaried contract staff.
‘These actions will increase the long-term profit and cash generation potential of the company and improve resilience through the cycle,’ Barra said in the statement.
The closure of the Lordstown plant in Ohio didn’t shock some analysts who predicted that location as one of GM’s targets.
The car produced there is also is built in Mexico. The once-bustling factory already has lost two of its three shifts and 3,000 union jobs since the beginning of last year.
But moving that car, the Chevrolet Cruze, south of the border brings the risk of provoking a backlash from President Donald Trump.
And GM also isn’t sure whether he’ll make good on threats to impose 25 per cent tariffs on vehicles imported from Canada and Mexico.
What’s more, the Cruze plant just outside Youngtown is in a Democratic and labor stronghold, where Trump won over a surprising number of voters two years ago by reaching out to what he called America’s ‘forgotten men and women’.
At a rally near the plant last summer, Trump talked about passing by big factories whose jobs ‘have left Ohio,’ then told people not to sell their homes because the jobs are ‘coming back. They’re all coming back’.
Altogether, GM has five car factories with plenty of unused capacity in Kansas City, Kansas; Lordstown; and Detroit-Hamtramck, Lansing, and Orion Township, Michigan.
Unifor, Canada’s largest private sector union, said in a prepared statement that it does not have complete details of the announcement, but it has been informed that there is no product allocated to the Oshawa plant past December 2019
Unifor, Canada’s largest private sector union, said in a prepared statement that it has been informed that there is no product allocated to the Oshawa plant past December 2019.
‘Based on commitments made during 2016 contract negotiations, Unifor does not accept this announcement and is immediately calling on GM to live up to the spirit of that agreement,’ the union said in a statement on its website.
Jennifer French, who represents Oshawa in the provincial legislature, said she finds the news ‘gravely concerning’.
‘If GM Canada is indeed turning its back on 100 years of industry and community – abandoning workers and families in Oshawa – then this is a callous decision that must be fought,’ she said in a statement.
GM posted earnings of $2.5billion for the quarter ending September 30, despite the impact of trade tariffs and slipping sales.