GM to Close 8 Plants, Lay Off Close to 15,000 Workers

Randal Sanchez
November 28, 2018

He said the decision to halt sales of the Chevrolet Cruze had "nothing to do with tariffs" but was because of poor sales. GM said its slimmed down production plan would allow it to share technology across all of its vehicles and reduce the amount of time and workers it takes to build cars.

"You know, the United States saved General Motors and for (CEO Mary Barra) to take that company out of OH is not good", he said.

"The layoffs are the inevitable outcome of an economic model that views workers as disposable and shareholder excitement as indispensable", said Scott Paul, president of the Alliance for American Manufacturing, a nonprofit that advocates for worker protections in the industry.

The United Automobile Workers (UAW) union vowed to "confront this decision by GM through every legal, contractual and collective bargaining avenue open to our membership". Plants without products include assembly plants in Detroit; Lordstown, Ohio; and Oshawa, Ontario. "We have a lot of pressure on them".

GM said the moves will save $6 billion in cash by the end of next year, including $4.5 billion in recurring annual cost reductions and a $1.5 billion reduction in capital spending.

The Associated Press reports the cuts could add up to as much as eight percent of GM's global workforce.

In February, the company said it would close one plant in South Korea.

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At the factories, 3,000 workers could lose jobs in Canada and another 3,600 in the US. GM expects to spend $1 billion on Cruise this year to build the next generation of cars.

"We are taking this action now while the company and the economy are strong to keep ahead of changing market conditions", General Motors CEO Mary Barra said during a conference call on Monday.

The Lordstown plant became a target in the restructuring as its lone product, the Chevy Cruze sedan variant, has faced drastically plummeting sales over the last calendar year.

A rule of thumb for the automotive industry is that if a plant is running below 80 percent of production capacity, it is losing money. GM has several plants running well below that.

GM's actions are meant to increase the automaker's profits and strengthen its core business, while it doubles investment in autonomous and battery electric vehicles by 2020 - a year before the automaker is expected to launch an all-new profitable electric vehicle platform. We want to make sure we're well-positioned. "Lordstown has been part of the GM family for more than 50 years so it's painful to see this happen to the plant's workers, their families and the community". "We've got a new Drive it Home Ohio campaign out just launched a week ago yesterday". Ford said in April it planned to stop building almost all cars in North America. Meanwhile, the decision to idle the plants is part of a strategic shift away from cars and toward trucks and SUV's ― Americans continue to buy big as gas prices remain relatively low ― as well as electric and self-driving vehicles.

As recently as 2012, passenger cars made up more than 50 percent of all USA new vehicle sales.

While industry-wide passenger auto sales were down 13.2 percent through the first nine months of the year, pick-up truck and SUV sales rose 8.3 percent.

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