G.M. for idle plants and cut thousands of jobs like slow sales


General Motors said on Monday it planned to shut down five factories in North America and cut more than 14,000 blue-collar and salaried jobs in an effort to cut costs.

The move follows the same job-cutting moves as Ford Motor in the face of slowing sales and a shift in consumer tastes, fueled in part by lower gasoline prices.

The five G.M. factories will halt production next year, resulting in the layoff of 3,300 production workers in the United States and about 3,000 in Canada. The company also aims to reduce its salaried staff to 8,000.

"We are taking this action now while the company and the economy are strong to stay ahead of changing market conditions," Mary T. Barra, CEO of G.M., said in a teleconference.

The factories include three automobile factories: one in Lordstown, Ohio, which makes up the Chevrolet Cruze; the Detroit-Hamtramck factory, where the Chevrolet Volt, the Buick LaCrosse and the Cadillac CT6 are produced; and a factory in Oshawa, Ontario, which mainly produces the Chevrolet Impala. In addition, the company will stop operations at transmission plants in the Baltimore area and Warren, Michigan.

Some of the affected factories could resume production, depending on the outcome of the contract negotiations with the United Auto Workers union next year.

News of the cuts in Canada had come up over the weekend. Within an hour of G.M.'s announcement, the workers left the Oshawa factory in a heavy rain. Shaking red flags and wearing ponchos with their union logo, the Unifor, they began blocking the entrances of the trucks.

Prime Minister Justin Trudeau said he expressed his "deep disappointment" at the closure for Ms. Barra. He added that the government is studying measures to help the unemployed G.M. workers "stand up again".

The cuts also set off political fire in the United States, where President Trump Prometheus early in his tenure to increase automation jobs and brought pressure on the industry not to shift work to Mexico and abroad. Senator Rob Portman, a Republican from Ohio, said: "I am deeply frustrated with General Motors' decision to close its Lordstown plant and disappointed with how the employees working there were treated throughout the process."

The United Auto Workers said GM's ruling "will not be uncontested." Shutting down American factories while expanding production in China and Mexico is "profoundly damaging to our American workforce," said the union vice president in charge of negotiations with GM. Dittes

But investors hailed the news, pushing the company's stock at about 5 percent to its highest level since July.

In recent years, as gasoline prices have remained low, consumers have gravitated toward larger, more spacious vehicles such as pickups and SUVs. Demand for small and medium-size cars plummeted. Earlier this year, Ford said it would stop manufacturing sedans for the US market and announced cuts to its workforce.

The companies also paid a price for the tariff battle that Mr. Trump put into action. In June, G.M. reduced its profit outlook for the year because steel tariffs were raising costs. The company does not import much steel into the United States, but rising demand for domestic steel has pushed up prices.

Barra said G.M. would save up to $ 2 billion in cash to pay for job cuts and charge nonfinancial rates against pre-tax earnings of about $ 1.8 billion. Charges will affect earnings in the fourth quarter of 2018 and in the first quarter of 2019.

Until last month, G.M. had been offering severance packages to lure salaried employees in North America to leave the company. In January, the company plans to cut additional white collar jobs on an involuntary basis. Between the two actions, it aims to eliminate 8,000 salaried jobs, or about 15% of its white collar workers in North America.

U.A.W. is preparing to negotiate new contracts with G.M., Ford and Fiat Chrysler next year. In recent years, the union has agreed to concessions in exchange for promises from manufacturers to keep factories open.

Overall, the auto industry has added nearly 350,000 jobs since the industry peaked after the Great Recession, with most of that growth under the administration of President Barack Obama. But the industry still employs tens of thousands of people less than before the crisis and hundreds of thousands less than in 2000.

About 970,000 Americans worked in the United States automotive industry in October, an increase of 12,800 since Trump took office in January 2017. Most of that growth, however, came in one corner of the industry, vehicle manufacturers ride and trailers. Auto parts manufacturers added about 2,000 jobs during this period. But by October, automakers such as G.M. had cut about 7,000 jobs under Trump's government, government figures show. (These numbers do not include the hundreds of thousands of workers employed by car dealers, workshops and related industries.)

The cuts in Canada were particularly sensitive because of politics, labor relations and history.

G.M. Canada is headquartered in Oshawa, an industrial city east of Toronto, where it was founded in 1907 by a car maker who licensed Chevrolet designs. Before a series of cuts began in the 1980s, its factories and engineering centers in Oshawa employed more than 40,000 people.

G.M. was the largest producer of vehicles in Canada until it was eclipsed by Toyota last year. An overwhelming majority of cars and trucks manufactured in that country are exported to the United States.

Although Canada and the province of Ontario took part in the rescue of GM After its request for bankruptcy nearly a decade ago and have repeatedly helped finance improvements at the Oshawa plant, Canadian political leaders offered little hope that they could reverse the decision of the company. Doug Ford, the premier of Ontario, said an official G.M. told him: "The ship has already left the dock."

The future of the plant seems to be in danger at some points in the past. But optimism about its future was restored in 2016, when G.M. made a $ 554 million investment in the operation as part of its contract with Unifor. Little of that feeling was found on Monday.

"The last thing we want to do is get out of the line, we really do not want to do that," said Eva McKeen, an inspector at the factory paint shop. "We just want G.M. to work with us – I do not know. Just as you are getting older, knowing that you do not have a job, is really painful. "

General Motors also said on Monday it would stop production at two unspecified mills outside North America by the end of next year.


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