General Motors says it’s going to scale back production, closing plants and cutting up to 15% of salaried jobs nationwide in a move they say will help decrease production costs and keep the company “lean” and “agile,” though they stopped short of blaming Trump administration steel tariffs for an increase in production costs.
Automotive News reports that the Detroit-based automaker, which has been in and out of dire financial straits for nearly a decade, will end production on the Chevrolet Cruz, the Impala, and the all-electric Volt. The company will also end sales of Cadillac XTS and Buick LaCrosse, but only in the United States. Cadillacs, while not entirely popular in the United States, are among GM’s biggest sellers worldwide, particularly in China.
GM will shutter at least three production plants, Oshawa Assembly in Canada, Lordstown Assembly in Ohio, and Detroit-Hamtramck Assembly in Michigan. Automotive News reports that two additional plants — a pair of propulsion plants in Michigan and Maryland — will also grind to a halt by the end of 2019.
The New York Daily News adds that, “[i]n terms of workforce reduction, GM also plans to cut 15 percent of its 54,000 salaried employees, and even slashing global executive positions by 25 percent. That adds up to more than 8,000 jobs, after nearly 18,000 salaried employees were offered buyout packages last week.”
Around 6,700 line workers in the United States and Canada will be “at risk” of losing their jobs, but the United Auto Workers (UAW) union suggested Monday that layoffs and furloughs would be discussed in upcoming contract meetings. The UAW’s large-scale contract with GM expires next year and negotiations will begin soon.
Early reports indicated that GM’s layoffs are the result of steel tariffs levied by the Trump administration in its fledgling trade wars with China, Canada, and the European Union, but GM says that no one factor led to the layoffs. The company, which came out of bankruptcy only a few short years ago, has to take steps to remain “lean” and “agile,” according to its CEO.
“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” CEO Mary Barra wrote in a statement released Monday morning.
The move is expected to save GM a lot of money and to help make it competitive with companies like Amazon, Google, and Tesla, which aren’t traditional automakers, but are dipping their toes into the auto-making industry with fully electric, low-cost, and even self-driving options for consumers.
CNN reports that the “company said the plan would make it more efficient, saving $6 billion a year by the end of 2020. 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.”