GM to close three plants
DETROIT — General Motors will close three assembly plants by the end of 2019, it said Monday, including Detroit-Hamtramck in Michigan, Lordstown in Ohio and Oshawa in Ontario.
More than 6,200 jobs are at stake: roughly 1,500 in Hamtramck; 1,600 in Lordstown; about 2,500 in Oshawa; and a total of 645 at transmission plants in Warren in suburban Detroit and near Baltimore.
The Hamtramck plant makes the Chevrolet Volt and Impala, the Cadillac CT6 and the Buick LaCrosse. Those vehicles and other cars made at the targeted facilities will be terminated.
In addition to the production cuts, GM said it will reduce its North American white-collar workforce by about 8,000. The deadline passed last week on a voluntary buyout for those workers, and GM spokesman Pat Morrissey told the Free Press that only 2,250 employees have asked to take the offer, meaning as many as 5,750 workers could be cut if the company keeps to its announced total. Analysts told the Free Press to expect involuntary cuts in January.
The company said it would save $6 billion by the end of 2020.
Morrissey said most of the U.S.-based production workers will have a chance to relocate to another GM plant. GM’s heavy-duty truck plant in Flint will be ramping up production and will need workers. Also, GM’s Arlington, Texas, plant where it builds its fullsize SUVs, is ramping up to build the next-generation Chevrolet Tahoe, Chevrolet Suburban, Suburban XL and GMC Yukon.
The company also confirmed it will add a third vehicle next year to its production lineup at its plant in Spring Hill, Tenn.
A future Cadillac crossover will be produced in Spring Hill, GM spokeswoman Courtney Jackson said Monday. The underused plant already produces the crossover Cadillac XT5 and GMC Acadia midsize SUV.
“GM is continuing to take proactive steps to improve overall business performance, including the reorganization of its global product development staffs, the realignment of its manufacturing capacity and a reduction of salaried workforce,” the company said in a news release Monday.
‘Transforming this company’
“GM wants to stay in front of changing market conditions and customer preferences for its long-term success,” GM Chairman and CEO Mary Barra told reporters in a morning briefing.
Barra said GM will end production at the plants in varied intervals, but it will stop production of the affected vehicles next year. Barra said, “We’ll still be providing those products until at least the end of 2019.” At that time, they will be no longer be produced for the U.S. market.
"What we’re doing is transforming this company,” Barra said. “This industry is changing very rapidly when you look at propulsion, autonomous driving and ride sharing. We want to be in front of it while the company is strong and the economy is strong.”
While $4.5 billion of the savings will be in capital investment, she said GM will still invest in its core products such as pickups, SUVs and “some cars” where it has already redesigned the architecture for those products.
The move will not affect GM’s production and sale of its full-sized 2019 Chevrolet Silverado and GMC Sierra pickups, Barra said. Oshawa builds the previous generation pickups, which is helping as GM transitions to sales of the current model.
“Those are good architectures from a fuel economy perspective ... we’ll continue to put those in the market, but we can take down our capital expenditures, while investing in electric and autonomous vehicles,” said Barra. “You will see a greater share invested in autonomous and electric vehicles, both from a capital expenditure and” increased hiring for electric and self-driving engineering jobs.
“We’re right-sizing our capacity both for the demands of the marketplace and what we see occurring in the U.S. and the global marketplace,” said Barra. “In the U.S. we see a very strong economy and we see opportunities around the globe. This is to make sure that GM is lean and ready to lead in the world in the cars our customers want and” the future of mobility.
President Donald Trump, who made keeping manufacturing jobs in the U.S. a major campaign point and promised Lordstown workers that their jobs were safe, was disappointed in the announcement.
“We don’t like it,” Trump said.
He said that he was “very tough” with Barra.
“I spoke with her when I heard they were closing,” Trump said in response to a reporter’s question specifically about the Lordstown closure. “And I said, ‘You know, this country has done a lot for General Motors. You better get back in there soon. That’s Ohio, and you better get back in there soon.”
UAW angry
The UAW reacted angrily. “This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce,” Terry Dittes, UAW vice president and director of the GM Department, said in a news release. “GM’s production decisions, in light of employee concessions during the economic downturn and a taxpayer bailout from bankruptcy, puts profits before the working families of this country whose personal sacrifices stood with GM during those dark days.”
Barra said GM will continue to hire new employees because it needs different skill sets to help develop electric and self-driving technology.
“We need to make sure we have the right skill set not only for GM today, but for the future so you will see us adding new people to the company even as we let people go,” said Barra.
She said people with technical experience are still needed across GM, especially those with experience in electrification. GM Cruise, the company’s self-driving car unit based in San Francisco, will continue to hire as well.
Barra said GM department heads across the company are looking at what jobs they really need going forward. In product development, for example, she said virtual tools can do more jobs than previously.
“For the first time in my memory, GM is leading the pack on tangible restructuring actions, and the dominoes are really starting to fall,” Jon Gabrielsen, an independent adviser to the auto industry. “This may not be the last plant closure for GM, and we have not yet seen Ford and FCA show their hands.”
While Ford is trimming its global white-collar workforce, it has said nothing about plant closures.
Auto sales hit record levels in 2016 and are slowing as automakers say they face challenges from both the slowing sales and tariffs on steel and aluminum as part of President Donald Trump’s trade war.
Like other automakers, GM is moving away from sedans to a lineup more focused on SUVs and trucks, in line with consumer demand.
“GM now intends to prioritize future vehicle investments in its next-generation batteryelectric architectures. As the current vehicle portfolio is optimized, it is expected that more than 75 percent of GM’s global sales volume will come from five vehicle architectures by early next decade,” the release said.
Workers at GM’s U.S. plants, particularly in Lordstown, have been concerned about production cuts. GM makes the Cruze sedan in Lordstown.
GM makes the Chevrolet Impala and Cadillac XTS cars and Chevrolet Silverado and GMC Sierra pickup trucks in Oshawa, according to its website.
Oshawa’s outgoing mayor, John Henry, tweeted Sunday night that he was “utterly heartbroken” by the news. “No one in Oshawa or our region is unaffected by these reports and the devastating announcement we hear is coming tomorrow morning.”
GM said it also is closing a propulsion plant in Baltimore and transmission plant in Warren. It said earlier this month that it would move Pontiac propulsion workers to the Tech Center in Warren. It also is moving Cadillac headquarters back to the Detroit area — near the Warren center — from New York.