Wed, Nov 28, 2018 page10

• GM to slash up to 14,000 jobs in North America

  INDUSTRY CHANGE: GM is still hiring engineers with expertise in electric and self-driving vehicles, while most of those to be axed work with conventional vehicles

  • AP, DETROIT
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  General Motors (GM) is to lay off up to 14,000 factory and white-collar workers in North America and put five plants up for possible closure as it restructures to cut costs and focus more on autonomous and electric vehicles.

  The reduction includes 8,100 white-collar workers, some of whom are to take buyouts while others would be laid off.

  Some US factory workers could transfer to truck or sport utility vehicle (SUV) factories that are increasing production.

  

  A General Motors Co worker holds a sign reading “Made In Oshawa Matters” during an informational meeting at Unifor Union Hall in Oshawa, Ontario, on Monday.

  Photo: Bloomberg

  Most of the affected factories build cars that would not be sold in the US after next year, including the Chevrolet Volt rechargeable gas-electric hybrid.

  They could close or they could get different vehicles to build.

  Their futures are to be part of contract talks with the United Auto Workers union next year.

  The salaried reductions amount to 15 percent of GM’s North American white-collar workforce of 54,000. At the factories, 3,000 workers could lose jobs in Canada and another 3,600 in the US.

  GM, the largest automaker in the US, which sells the Chevrolet, Buick, Cadillac and GMC brands, said the moves would save US$6 billion in cash by the end of next year, including US$4.5 billion in recurring annual cost reductions and a US$1.5 billion reduction in capital spending.

  Those cuts are in addition to US$6.5 billion that the company has announced by the end of this year.

  GM does not 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.

  GM is still hiring people with expertise in software, and electric and autonomous vehicles, Barra said, adding that many of those who are to lose jobs are working on conventional cars with internal combustion engines.

  The industry is changing rapidly and moving toward electric propulsion, autonomous vehicles and ride-sharing, and GM must adjust with it, Barra said.

  The company has invested in newer architectures for trucks and SUVs so it could cut capital spending while still raising investment in autonomous and electric vehicles, she added.

  GM has offered buyouts to 18,000 retirement-eligible workers with a dozen or more years of service. It would not say how many have accepted the buyouts, but it was short of the company’s target, because GM said there would be white-collar layoffs.

  The company expects to take a pretax charge of US$3 billion to US$3.8 billion due to the actions, including up to US$1.8 billion of asset write-downs and pension charges. The charges are to take place in the fourth quarter this year and the first quarter of next year.

  The factories up for closure are part of GM’s effort “to right-size our capacity for the realities of the marketplace,” as consumers shift away from cars to trucks and SUVs, Barra said.

  Among the possibilities are the Detroit/Hamtramck assembly plant, which makes the Buick LaCrosse, the Chevrolet Impala and Volt, and the Cadillac CT6, all slow-selling cars.

  LaCrosse and Volt production is to end on March 1, while CT6 and Impala production would stop on June 1.

  The plant in Lordstown, Ohio, which makes the Chevrolet Cruze compact car, is also on the list, and the Cruze would no longer be sold in the US, Barra said.

  Production of the vehicle is to stop on March 1.

  Work on six-speed transmissions made at the Warren, Michigan, transmission plant would stop on Aug. 1, while the Baltimore transmission plant would stop production on April 1, GM said.

  Meanwhile, GM’s plant in Oshawa, Ontario, is to stop making the Impala, Cadillac XTS and this year’s full-size pickups in the fourth quarter of next year.

  Tariffs on imported aluminum and steel have hit the company, Barra said, but stopped short of saying they had anything to do with the restructuring.

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