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

Things are worse than widely thought in the auto industry. Today, GM provided the proof.

GM will close 5 North America plants, another three elsewhere. GM claims it does not see a downturn but will Slash Nearly 15,000 Jobs anyway.

Four factories in the U.S. and one in Canada could be shuttered by the end of 2019 if the automaker and its unions don't come up with an agreement to allocate more work to those facilities, GM said in a statement Monday.

Plants without products include assembly plants in Detroit; Lordstown, Ohio; and Oshawa, Ontario. Also affected are transmission factories in Warren, Mich., as well as Baltimore.

The salaried reductions amount to 15 percent of GM's North American white-collar workforce of 54,000.

Eight Plants

The above articles only mentioned five plants.

The BBC says GM Will Shutter Eight Plants.

In February, the company said it would close one plant in South Korea. It also offered voluntary buyouts to up to 18,000 workers in October.

The firm said it would name the two additional international plants set for closure later.

No Downturn?!

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.

GM Translated

GM sees an economic downturn or at least a car downturn and did so back in April when it stopped reporting monthly car sales.

Say Goodbye to Sedans

GM will stop making the Chevrolet Cruze, the Chevrolet Volt plug-in hybrid, and large sedans including the Chevrolet Impala, Buick LaCrosse and Cadillac CT6.

18,000 Buyouts

Also consider GM to Idle Factories, Cut Thousands of North American Jobs.

GM said it would end production next year at three North American assembly plants and two smaller transmission factories, which combined employ more than 6,700 workers. Those include a factory in Lordstown, Ohio, where GM makes the Cruze; the Detroit-Hamtramck plant in the company’s hometown, where it makes the Volt and several large sedans; and a factory in Oshawa, Ontario, where such models as the Impala, the Cadillac XTS, the Chevy Silverado and the GMC Sierra pickup are made.

GM, in October, said it would offer buyouts to about 18,000 salaried employees. Workers had until last week to decide whether to leave the company. GM wouldn’t disclose how many employees have accepted the buyout. The auto maker had about 180,000 employees world-wide at the end of 2017, including approximately 103,000 in the U.S., according to a regulatory filing.

The United Auto Workers union, which represents employees at GM’s U.S. factories, said in an emailed statement that it will challenge GM’s decision through legal, contractual, and collective bargaining means. The group called GM’s decision “callous” and said the auto maker is putting profits above using American labor.

Cars Aren't Selling, So Stop Producing Them

The Auto Union is precisely one of GM's problems. This is a business decision. It makes no sense to keep producing some car models at a loss.

The union drove GM into bankruptcy once before and would do so again.

Mike "Mish" Shedlock

Comments (35)
No. 1-18
SMF
SMF

No profit, no jobs. How hard is that to understand?

shamrock
shamrock

Need more tariffs!

KidHorn
KidHorn

Might be a result of the mid terms. The dems are going to take over in 2020, which means electric vehicles will be pushed by our gov't. Plus it may be easier to lay off employees now than after 2020 when big companies will be evil.

JonSellers
JonSellers

GM's still in business? I had a Pontiac in the early '90's and swore I'd never buy another GM product. Since then I've only owned 3 hondas. I gave the first two away to my kids for high school. I don't have any more kids to give my current one away to, so I'll probably be buried in it.

sunny129
sunny129

Does this manuver save GM?

Good luck! I just bought some puts on GM!

Schaap60
Schaap60

Last time it took a century to drive GM into bankruptcy. This time it may take a little more than a decade. The world is moving faster.

2banana
2banana

But...but...the obama sham bailout was supposed to fix GM/GMAC.

And the American taxpayers lost over $10 billion in that sham bailout when the last share of government owned GM stock was finally sold in 2014.

$10 billion loss for about 8 extra years to keep the shame going and keep the UAW whole. And a destruction of 100 years of contract law.

And here we are again...

Ted R
Ted R

Deflation is a job killer.

Realist
Realist

Competition and free market capitalism has been changing the job market for hundreds of years. It isn’t going to stop.

Carl_R
Carl_R

Don't forget that, thanks to the tariffs, GM has to pay 25% more for steel and aluminum than it's Japanese and German competitors. That's just one more burden on them.

Realist
Realist

Hi Carl. The tariffs on steel and aluminum also apply to Japanese and German manufacturing plants in the US. So the tariffs threaten all US auto jobs. And GMs facilities in other countries aren’t affected by Trumps tariffs so their workers in other countries are in better shape.

Brother
Brother

In 1926 Henry Ford shut down 34 plants for over a half a year then came out with the Model A.

Sechel
Sechel

The irony that this is happening less than a decade from the last G.M. bail out leaves me gobsmacked. Doesn't take much to wonder in what shape G.M. and Ford would be without the safety net of a 25% tax on foreign light trucks which is really a tax on U.S. consumers. Once again businesses dependent on gov't protection never really grow but become dependent on that life support. These aren't nascent industries but mature perhaps dying ones or to be kind fairly mature ones

Trump's steel tariffs may not be the nail in the coffin but they clearly aren't helping and probably accelerating the decision acting as a catalyst. One you start budding into a trillion dollar economy its awfully hard to engage in pin-point precision. Every action has an equal and opposite re-reaction.

I had to laugh because just a few weeks ago I saw that U.S. car companies are now betting on E-bikes. Not to mock E-bikes but selling bicycles is not going to rescue G.M. with its huge fixed costs, although I'm betting those E-bikes are re-badged items made in Asia, probably China or Taiwan.

pi314
pi314

With interest rate rising, it is only a matter of time that these unprofitable companies with huge borrowing costs get in trouble. Sears was the first, many to follow.

Blurtman
Blurtman

They should fire their design team. Their cars and SUV’s look like shyte.

Top-GUN
Top-GUN

Will GM also shut down their Rubber rooms. YES, Google it,,, a place where GM sent workers (employees) who literally had nothing to do. Workers every day went to a warehouse and sat around doing NOTHING. Thank you Mr Union. And every time someone bought a GM product that was where some of their money went, and of course more went straight out the door to pensioners. .. A POX on the whole thing...

Sechel
Sechel

in another decade or so, U.S. will be full blown electric cars. The players may all change. Why protect a dinosaur?

everything
everything

They might not get bailed next time, bought out instead? time to lean up. We are already seeing mergers/buyouts/bankruptcies. We see this more leading up to or during recessions, especially the last tech bust, easy pickings. They are still providing good middle class jobs, and to see any go hurts.