General Motors Says Factory Closings and Restructuring Will Cost 14,700 Jobs

Tuesday, 27 Nov, 2018

General Motors will 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.

Canadian Innovation Minister Navdeep Bains said that GM "only made this official announcement to us yesterday". Its shares rallied 7.6 percent to $38.66.

General Motors Canada will announce on Monday that it's closing its plant in Oshawa, Ont., in a move that will affect thousands of jobs in the city east of Toronto, The Canadian Press has learned.

The firm said it was cutting production of the Buick LaCross, Chevrolet Volt, Cadillac CT6 and XTS and Chevrolet Impala, as well as older versions of the Silverado and Sierra. The Cruze compact auto will be discontinued in the U.S. market in 2019.

The automaker did not say the plants would close, but used the term "unallocated", which means no future products would be allocated to these facilities next year.

Chief executive Mary Barra said the company must keep pace with the trend for electric and self-driving cars and that GM was still hiring people in those fields. He said he told the company that the USA has done a lot for GM and that if its cars aren't selling, the company needs to produce ones that will. The United Auto Workers union, which represents employees at GM's US factories, said in an emailed statement that it will challenge GM's decision through legal, contractual, and collective bargaining means.

Reports about GM's plan to close the Oshawa plant in Ontario have proven to be true.

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The decision was quickly criticized by Ohio politicians such as Representative Tim Ryan (D-13th district), who said in a press release the announcement was "devastating for Northeast Ohio". Executive ranks will also be whittled down by 25 percent to streamline decision making.

America's largest auto maker said some workers would transfer to SUV and truck factories, which are increasing their output because of growing demand. "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", Senator Portman said. Some 75 percent of its global sales will come from just five vehicle architectures by the early 2020s. In all, GM plans to cut 10,000 jobs in North America.

Smith also noted Ontario PCs have "taken aim at the federal carbon tax", while outlining what the government has done to create an environment for businesses to stay in the province.

The auto giant is reportedly preparing for the next economic downturn, shifting trade agreements under the Trump administration, and potential tariffs on automobiles. They recalled how the Ontario government had helped GM Canada out with bailout money nearly 10 years ago...

In 2009, GM shut down truck assembly at the plant, citing high gas prices and a deep recession caused by the financial crisis.

"These manufacturing actions are expected to significantly increase capacity utilization", the company said in a statement.

In a statement, Conservative Leader Andrew Scheer said the news represents the end of a "long and proud tradition in Oshawa", a reliable home to GM for more than 100 years. "We're very, very disappointed with the news". Another two will close outside North America.