DETROIT (AP) — 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.
The reduction includes 8,100 white-collar workers, some of whom will take buyouts and others who will be laid off. Some U.S. factory workers could transfer to truck or SUV factories that are increasing production.
Most of the affected factories build cars that won’t be sold in the U.S. after next year, including the Chevrolet Volt rechargeable gas-electric hybrid. They could close or they could get different vehicles to build. Their futures will 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 U.S.
GM, the largest automaker in the U.S., which sells the Chevrolet, Buick, Cadillac and GMC brands, said the moves will save $6 billion in cash by the end of next year, including $4.5 billion in recurring annual cost reductions and a $1.5 billion reduction in capital spending.
Those cuts are in addition to $6.5 billion that the company has announced by the end of this year.
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.
Barra said GM is still hiring people with expertise in software and electric and autonomous vehicles. Many of those who will lose jobs are now working on conventional cars with internal combustion engines.
Barra said the industry is changing rapidly and moving toward electric propulsion, autonomous vehicles and ride-sharing, and GM must adjust with it.
The company, she said, has invested in newer architectures for trucks and SUVs so it can cut capital spending while still raising investment in autonomous and electric vehicles.
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 will be white-collar layoffs.
The company expects to take a pretax charge of $3 billion to $3.8 billion due to the actions, including up to $1.8 billion of asset write downs and pension charges. The charges will take place in the fourth quarter of 2018 and the first quarter of next year.
“I am deeply frustrated with General Motors’ decision to shut down its Lordstown plant and disappointed with how the hardworking employees there have been treated throughout this process,” said Sen. Rob Portman (R-Ohio). “During frank conversations with GM CEO Mary Barra after the announcement that GM cut a shift at the plant due to the weakening market for the Chevy Cruze, I urged her to look to the Lordstown plant for production of other vehicles and to make a public commitment to the plant and its workforce.
“During today’s conversation, I pressed GM again to provide new opportunities to the Lordstown workers and take advantage of the skilled workforce there. 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. In the short term, I urged GM to at least reallocate some of the production and employees to the Toledo GM plant.
“I will continue doing everything I can to help the Lordstown workers during this transition. For decades, workers in the Mahoning Valley have made a commitment to GM, and today GM let Northeast Ohio down.”
Sen. Sherrod Brown (D-Ohio) said, “The workers at Lordstown are the best at what they do, and it’s clear once again that GM doesn’t respect them. Ohio taxpayers rescued GM, and it’s shameful that the company is now abandoning the Mahoning Valley and laying off workers right before the holidays. Even worse, the company reaped a massive tax break from last year’s GOP tax bill and failed to invest that money in American jobs, choosing to build its Blazer in Mexico.
“GM owes the community answers on how the rest of the supply chain will be impacted and what consequences its disastrous decision will have on the Mahoning Valley and our state. My office stands ready to do everything we can to help these workers. This decision is corporate greed at its worst.”
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 will end March 1, while CT6 and Impala production would stop June 1.
The plant in Lordstown, Ohio, which makes the Chevrolet Cruze compact car also is on the list, and Barra said the Cruze would no longer be sold in the U.S. Production would stop March 1.
Work on six-speed transmissions made at the Warren, Michigan, transmission plant would stop Aug. 1, while the Baltimore transmission plant would stop production April 1, GM said.
Meanwhile, GM’s plant in Oshawa, Ontario, will stop making the Impala, Cadillac XTS and 2018 full-size pickups in the fourth quarter of next year.
Barra said tariffs on imported aluminum and steel have hit the company, but she stopped short of saying they had anything to do with the restructuring.
Gillies reported from Toronto. The News Journal contributed to this story.