The Times Herald (Norristown, PA)
GM to lay off up to 14K workers, close plants
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.
The 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 preemptive 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.
GM isn’t the first to abandon much of its car market. Fiat Chrysler Automobiles got out of small and midsize cars two years ago, while Ford announced plans to shed all cars but the Mustang sports car in the U.S. in the coming years.
The layoffs come amid the backdrop of a trade wars between the U.S., China and Europe that likely will lead to higher prices for imported vehicles and those exported from the U.S. GM CEO Mary Barra said the company faces challenges from tariffs but she did not directly link the layoffs to them.
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,” Barra told reporters.
Factories that could be closed include assembly plants in Detroit and Oshawa, Ontario, and Lordstown, Ohio, as well as transmission plants in Warren, Michigan, and near Baltimore.
The announcement worried GM workers who could lose their jobs.
“I don’t know how I’m going to feed my family,” Matt Smith, a worker at the Ontario factory, said Monday outside the plant’s south gate, where workers blocked trucks from entering or leaving. “It’s hard. It’s horrible.” Smith’s wife also works at the plant. The couple has an 11-month-old at home.
Workers at the Ontario plant walked off the job Monday but were expected to return Tuesday.
After the morning announcement, Barra was to head for Washington to speak with White House economic adviser Larry Kudlow in what was described as a previously scheduled meeting, according to a White House official who spoke on condition of anonymity because the official was not authorized to discuss the meeting publicly.
President Donald 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 reelection, said his administration and lawmakers are exerting “a lot of pressure” on GM.
Trump said he was being