General Motors announced cutbacks Monday morning, they were more severe than most analysts expected – and were certainly steeper than leaked reports published late Sunday and early Monday had suggested.
After GM shares were halted pending news following a 2%+ jump after the open, Barra revealed that the company would shutter 7 plants (5 in North America and 2 international) after 2019, fire 15% of its salaried workforce and shift hiring priorities to more tech workers in a cost-cutting drive intended to save the company some $6 billion by the end of 2020. As GM seeks more workers with “different skills”, it also plans to shift its investment focus toward electric and autonomous vehicles.( this is the most important statement in entire article. The skills requirement has changed and if you do not change with the new world of technology then there are no jobs)
Canadian Prime Minister Justin Trudeau has expressed “deep disappointment” at GM’s decision to close its plant in Oshawa, Ontario.
Here’s a quick rundown of the closures:
1. Oshawa Assembly in Oshawa, Ontario, Canada a 67 year old plant.(GM’s website, the Oshawa Assembly Plant employs 2,522 workers with Unifor Local 222. Production began on Nov. 7, 1953. In the 1980s, the plant employed roughly 23,000 people.)
2. Detroit-Hamtramck Assembly in Detroit.
3. Lordstown Assembly in Warren, Ohio.
4. Baltimore Operations in White Marsh, Maryland.
5. Warren Transmission Operations in Warren, Michigan.
6/7. In addition to the previously announced closure of the assembly plant in Gunsan, Korea, GM will cease the operations of two additional plants outside North America by the end of 2019.
Barra said the cutbacks are a response to sagging car sales in domestic and international markets (sedan sales have floundered while pickup truck sales remain robust) and the impact of Trump’s trade war. The steel tariffs alone have already cost GM some $1 billion this year, the company said.
The firm will cut 15% of its salaried workforce, including a 25% reduction in the number of executives to streamline decision making. All told, the company is expected to cut nearly 15,000 salaried and hourly jobs.
oh! before I forget
After Wasting nearly $14 billion on Share-Buybacks, GM Prepares for Carmageddon & Shift to EVs, Cuts Employees, Closes 8 Plants. A big shift, at a cost of $3.8 billion – which it now has to borrow.
I can assure you Ford will not be behind.
full press release below
https://www.prnewswire.com/news-releases/general-motors-accelerates-transformation-300755112.html