General Motors emerged from bankruptcy eight years ago, and it is once again getting ready for a major shake-up. The automobile company will shut down three North American assembly plants and two other facilities. It will also eliminate 15 percent of its salaried and salaried contract workforce. The total jobs lost will hit approximately 14,700.
These slashes are a portion of a plan to adapt to changing market demands that are favoring SUVs over sedans and coupes. It also is due to the demand for electrified and self-driving vehicles GM sees as central to the industry’s future.
“We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success,” said GM Chairman and Chief Executive Officer Mary Barra. She outlined her new plan during a conference call Monday morning.
Barra was reportedly preparing to meet with White House economic adviser Larry Kudlow, just after the company’s announcement, according to CNBC. Earlier this year, the company warned that President Donald Trump’s import tariffs “could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk fewer — not more — U.S. jobs.”
Trump told reporters Monday afternoon he was “not happy” about the news. The president added that that the U.S. “has done a lot” for GM, and that the auto giant “had better put something else” in Ohio, one of the states where layoffs have been announced.
The job losses aren’t limited to the factory floor. GM previously announced it would be using buyouts to eliminate up to 7,000 white-collar jobs. Monday’s news confirmed “involuntary separations” that will ultimately eliminate about 15 percent of its salaried jobs.
The auto company also has announced plans to rapidly expand its line-up of battery cars shifting away from the gas and diesel models that make up its present line-up.
“GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures,” the company said in a Monday news release. “As the current vehicle portfolio is optimized, it is expected that more than 75 percent of GM’s global sales volume will come from five vehicle architectures by early next decade.”
The United Auto Workers union was quick to respond, and vowed to fight the GM restructuring. “This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce,” said Terry Dittes, UAW Vice President, Director GM Department.
“GM’s production decisions, in light of employee concessions during the economic downturn and a taxpayer bailout from bankruptcy, puts profits before the working families of this country whose personal sacrifices stood with GM during those dark days. These decisions are a slap in the face to the memory and recall of that historical American-made bailout,” he said.