General Motors Co recently announced it was slashing production of struggling models and reduce its North American workforce.
Many industry experts point to a stagnation in the gas-powered market as more drivers shift to autonomous and electric vehicles. The decision leads to the biggest restructuring in North America for a leading carmaker since GM’s bankruptcy announcement over a decade ago.
Downsizing production and people
GM will stop production at the following three plants: Lordstown, Ohio; Hamtramck, Michigan; and Oshawa, Ontario.
The company will also stop making the models assembled at those plants -- the Chevy Cruze, Cadillac CT6, and the Buick LaCrosse. GM will discontinue the Cruze in the US market by 2019.
Sales of the Cruze -- made at the Lordstown, Ohio location -- dropped by 27 percent through September 2018.
Two factories outside of North America will also close, but no word from GM as to what locations those are. In total, GM’s North American salaried workforce will shrink by 15 percent (8,000 jobs).
The company also said it would cull executive ranks by 25 percent in the cuts.
“We are right-sizing capacity for the realities of the marketplace,” Chief Executive Mary Barra said. Barra also noted GM could cut capital spending by $1.5 billion. She said the company could increase its investments in electronic and autonomous vehicles.
“We need to make sure that we are well positioned to compete, not just over the next few years, but well beyond,” she said.
Fighting the closures
The United Auto Workers (UAW) union said they would confront GM on its decision on behalf of those who would lose their jobs.
“General Motors decision today to stop production at the Lordstown, Ohio, and Hamtramck, Michigan, assembly plants will idle thousands of workers, and will not go unchallenged by the UAW,” Terry Dittes, UAW Vice President in charge of negotiations with GM, said.
Mayor of Detroit Mike Duggan told the media he found the news “troubling” for the city. He said the city’s economic development team wanted to partner with the UAW to “come up with a solution that works for GM and the employees.”
American leaders aren’t the only ones trying to negotiate with GM. Canada’s Prime Minister Justin Trudeau said he told Barra about his “deep disappointment” in the decision, according to reports.
Interesting Engineering will continue to watch for updates from GM and its competitors. We’ll update this story as more information becomes available.