GM to close up to five factories in the United States, slash jobs

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

General Motors' plans to end production next year at five North American plants and slash salaried head count by 15 percent will not come without risks and consequences.

GM will shutter at least three production plants, Oshawa Assembly in Canada, Lordstown Assembly in OH, and Detroit-Hamtramck Assembly in MI. The company also plans to stop building several models now assembled at those plants, including the Chevrolet Cruze, the Cadillac CT6 and the Buick LaCrosse, the sources said. Plants without products include assembly plants in Detroit; Lordstown, Ohio; and Oshawa, Ontario.

The reduction includes 8,100 white-collar workers, some of whom will take buyouts and others who will be laid off. The company makes materials that are eventually sent to other manufacturers that then build the electronic components that auto factories like GM use in their vehicles.

At the factories, around 3,300 blue-collar workers could lose jobs in Canada and another 2,600 in the US, but some USA workers could transfer to truck or SUV factories that are increasing production. GM said the cuts will boost automotive free cash flow by US$6 billion by the end of 2020 and result in one-time charges of up to US$3.8 billion in the fourth quarter of this year and first quarter of 2019.

The shift by USA consumer preferences have been away from passenger cars to larger, more comfortable SUVs and pick-up trucks has been swift and severe, leaving automakers scrambling to readjust.

"It's not about jobs to them; it's about profits", said U.S. Rep. Timothy J. Ryan, D-Howland.

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Autonomous vehicles remain in testing and face a litany of safety and regulatory hurdles, while full battery-electric vehicles represent roughly 1 percent of USA sales this year, according to IHS Markit. Lordstown Local School District expects to lose 10 percent of its budget - $800,000 per year, said Superintendent Terry Armstrong. 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," CEO Mary Barra told reporters. The UAW's large-scale contract with GM expires next year and negotiations will begin soon.

Ohio Congressman Tim Ryan called for Congressional hearings into the plant closures Monday.

The president said that the layoffs had nothing to do with tariffs and instead blamed Barra for making cars that don't sell.

The plan is a continuation of a 2015 strategy the company laid out, the news release states.

"I once again urged GM to make a commitment to bring a new product to the plant, especially since GM is proposing to build a number of new electric vehicles", Mr. Portman said. The plant is used to make the Cadillac XTS and Chevrolet Impala sedans as well as the Chevrolet Silverado and GMC Sierra trucks. The automaker in June ended the second shift at its factory in Lordstown, Ohio, cutting 1,500 workers.

GM has begun what is expected to be a long and expensive transition to a new business model that embraces electrified and automated vehicles, many of which will be shared rather than owned. Some US workers would transfer to truck and SUV plants where GM is increasing output, the company said. UAW said the "Drive It Home" campaign will continue, despite the layoffs. The cuts are a setback for President Trump who said past year in Ohio, "We are going to get those jobs coming back and we are going to fill up those factories or rip 'em down and build brand new ones".

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