GM 'Reorganization' Includes Plant Closures, Layoffs

Donald Trump’s victories in Ohio and Michigan—places where General Motors will shut shop—helped seal his electoral vote total and the presidency

GM past year promised to launch a fleet of 20 new battery electric vehicles in North America by 2023, along with at least 10 new electric vehicles in China by 2020.

"We tried to get his attention on this issue two years ago", Mr. Ryan said.

"We estimate sedans operate at a significant loss, hence the need for classic restructuring", he wrote.

The layoffs will hit 8,000 white-collar employees and at least 5,900 blue-collar workers. Some will take buyouts while others will be laid off.

The planned job reductions, which triggered political pushback in the Midwest U.S. and Canada, come on the heels of surprisingly strong third-quarter earnings.

GM is also dealing with some higher costs associated with tariffs on imported steel and aluminum, which has raised its commodity costs by about $300 million in the third quarter and could raise costs by $1 billion next year.

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The company says 5,901 hourly employees and 804 salaried employees work at these plants.

Barra did not link Monday's cuts to tariff pressures, but said trade costs are among the "headwinds" GM faces as it deals with broader technology change and market shifts. GM expects to spend $1 billion on Cruise this year to build the next generation of cars.

Ms. Barra said the automaker 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". The official spoke on condition of anonymity because they were not authorized to talk publicly ahead of Monday's announcement. Wall Street cheered the actions, while U.S. and Canadian leaders expressed outrage. The Chevy Volt plug-in hybrid will also be dropped along with the Chevy Cruze compact (which is sold as the Holden Astra sedan here and built in Korea), which will be made in Mexico for other markets. "They better put something else in", Trump, who has pushed for more manufacturing jobs throughout his nearly two years in office, said. "They're all coming back".

Not allocating product doesn't mean the plants will close, but it puts their future and the jobs of roughly 6,300 hourly and salaried factory employees-3,300 in the US and 3,000 in Canada-at risk heading into contract negotiations with the UAW in 2019 and Canadian union Unifor in 2020.

GM has internally debated for months how to address shrinking vehicle demand, a person briefed on the matter said, and the issue is certain to re-emerge when GM holds contract talks next year with the United Auto Workers (UAW) union.

But the next automaking leader may not be GM or one of its traditional rivals.

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The company has "unallocated" production from three auto factories (Oshawa, Detroit-Hamtramck and Lordstown), and two engine and transmission plants (Baltimore and Warren) after 2019.

Trump said he wasn't impressed with GM officials' explanation that the company is closing the OH plant because of poor sales of the model it manufactures. "They are not closing our damn plant without one hell of a fight".

"Everything is up in the air", she said. The vehicle produced there is also is built in Mexico. I spend more time around them than my own family. Sherrod Brown said in a statement.

Barra is reducing staff from operations that make conventional cars and hiring people who can design electric cars or add software prowess to GM Cruise LLC, the automaker's autonomous vehicle unit in San Francisco.

"We are right sizing capacity for the realities of the marketplace" CEO Mary Barra said, adding that the cuts prompted by auto industry changes.

GM also said that the company will cut the Buick LaCrosse, Chevrolet Impala and Cadillac CT6 sedans next year.

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The cost-cutting happened on Monday, when GM announced that it would eliminate about 14,000 jobs in North America and could close five manufacturing plants.

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