GM Refocus on EV and AV Production
General Motors (GM) plans to make a significant change in focus of its car production strategy on to EVs and driverless vehicles in a bid to chase improved future car sales.
The move comes with its intention to close five factories in North America and cut more than 14,000 jobs and shut three international plants by the end of 2019. The plan follows rising costs of production, in part being blamed on President Donald Trump’s steel and aluminum tariffs thought to have cost the US carmaker around $1Bn.
It also comes in the face of falling sales of small cars and against large SUVs and pick-up trucks which will also be the focus of GM’s new strategy along with EV and AV models.
Ironically, the carmaker will be axing its groundbreaking EV Chevrolet Volt amid the refocus along with the Buick LaCross, Chevrolet Impala and Cruze, as well as the Cadillac CT6 and XTS, all sedans, as well as older versions of the Silverado and Sierra. The closures in North America include an assembly plant in Oshawa, Canada; facilities in Detroit and Warren in Michigan; a plant in Warren, Ohio and a site near Baltimore in Maryland. It is also closing a factory in South Korea following ailing sales as announced in February, on top of two other as yet unnamed international plants.
GM said it expects the North American cuts to affect more than 6,100 shift workers at the five plants, as well as more than 8,000 salaried employees. The carmaker currently employs about 180,000 salaried and shift staff and is aiming to reduce the number of salaried employees by 15%, including 25% fewer executives. In October it had offered voluntary redundancy deals to 18,000 workers.
Chair and CEO Mary Barra said GM wants to invest in electric and autonomous vehicles, which are expected to drive future industry growth. The company said the plan would help it save about $6Bn by the end of 2020. Barra said: “The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future. We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
Shares in the company jumped almost 5% after the announcement but the firm faced attacks outside of Wall Street including from Trump who will see this as an attack on his policy of promoting US jobs and from Canadian Prime Minister Justin Trudeau who said he called Barra to express his “deep disappointment” in the closure of the Canadian GM plant, which has been in the province of Ontario for a century.
Labor unions in the US and Canada also said they would pressure the company to allocate more work following the EV and AV refocus to the factories instead of closing them down.
— Paul Myles is a seasoned automotive journalist based in London. Follow him on Twitter @Paulmyles_
