Published: Tue, November 27, 2018
Money | By Wilma Wheeler

GM to slash 14,700 jobs in North America

GM to slash 14,700 jobs in North America

The company, which is shifting its focus to electric and autonomous vehicles, has been cutting jobs to deal with plunging auto sales in North America and has been debating for months how to address shrinking auto demand. Some will take buyouts while others will be laid off.

Besides the five plants in USA and Canada, GM said it would cease the operations of two more plants outside North America by the end of 2019.

The restructuring announcement also comes after Canada and the USA reached the United States-Mexico-Canada Agreement to replace the North American Free Trade Agreement, after months of strained negotiations.

The changes announced Monday will not impact GM's new trucks and SUVs, which are Barra said are "doing very well". It was about 50 percent cars just five years ago. Bains said "all options are on the table" for GM employees.

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

Canada's Unifor union, which represents most of the workers at Oshawa, issued a statement pledging to fight the closure.

GM did not immediately comment on Trump's remarks, but the company noted it has other facilities in OH including a transmission plant in Toledo and metal center in Parma. The Cruze compact vehicle will be discontinued in the U.S. market in 2019.

Shares of GM, the largest automaker in the US which sells the Chevrolet, Buick, Cadillac and GMC brands, rose almost 6 percent on the news to $37.98 in Monday afternoon trading.

With its reduced head count and production footprint, the automaker hopes to save US$6 billion ($8.3 billion) by the end of 2020. The company has scaled back production at its plants, with its hourly workforce down by 4,000 people in 2017, according to GM's annual report. It is unclear whether they will also be affected. Barra said the industry is changing rapidly and moving toward electric propulsion, autonomous vehicles and ride-sharing, and GM must adjust. During frank conversations with GM CEO Mary Barra after the announcement that GM cut a shift at the plant due to the weakening market for the Chevy Cruze, I urged her to look to the Lordstown plant for production of other vehicles and to make a public commitment to the plant and its workforce.

In a statement, Detroit Mayor Mike Duggan described the news as "troubling" and said that the city's economic development team and the UAW union are "working together to come up with a solution that works for GM and the employees".

The company says the closures will "significantly increase capacity utilization".

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

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. "They know they're making a great product. but they also realize that the vehicle is not selling, and, you know, the key is to get another product for this plant". The United Auto Workers union has said the move was callous.

Oshawa has two assembly lines: The flex line produces the low-volume Cadillac XTS and Chevrolet Impala while the truck line produces the light- and heavy-duty Chevrolet Silverado and GMC Sierra pickups. The Chevrolet Cruze is built at the Trumbull County complex.

The General Motors Canada office in Oshawa, Ont., is photographed on Wednesday, June 20, 2018.

She now faces an uncertain future, not knowing whether the plant will close for good or if there's a chance it could find another use.

When pressed about trying to get GM to reverse course, he replied: "that ship has already left the dock".

Canadian Prime Minister Justin Trudeau said he spoke with Barra and expressed "deep disappointment".

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