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Auto giant announces closing iconic plants to slash workforce in bid for electric self driving future

Today General Motors announced they are restructuring their global business. As part of that restructuring, they plan to shut down production at five facilities in North America and reduce their salaried workforce by 15%. This will include a quarter of their executives.

GM believes that new technology is the future:

“GM’s (GM) new motto is “Zero Crashes, Zero Emissions, Zero Congestion,” signaling a shift to self-driving, electric vehicles. But the restructuring is also about making cars people want now. Customers are increasingly shunning sedans in favor of SUVs and hatchbacks.

The company said the plan would make it more efficient, saving $6 billion a year by the end of 2020. GM said its slimmed down production plan would allow it to share technology across all of its vehicles and reduce the amount of time and workers it takes to build cars.”1

The following plants, who made the Chevrolet Volt, Impala and Cruze, the Buick LaCrosse, and the Cadillac CT6 and XTS, are set to close:

  • Hamtramck, Detroit
  • Oshawa, Ontario;
  • Warren, Ohio;
  • White Marsh, Maryland;
  • and Warren, Michigan.

They also plan to close three plants outside North America by the end of 2019.

This transition will cost about 8,000 salaried workers their jobs. Another 6,000 hourly workers will either lose their jobs or be reassigned to other plants. This comes after GM having offered voluntary buyouts for 18,000 salaried workers last month.

While the company is doing well, “sales are starting to slip in China and North America, two of GM’s biggest and most important markets”2 so “General Motors, under CEO Mary Barra, is trying to get ahead of a potential crisis by making cuts now,’  said Michelle Krebs, executive analyst at Autotrader.”3

Rebecca Lindland, an executive analyst at Kelley Blue Book, is worried about losing the valuable legacy of knowledge and experience that long-term GM employees bring to the market. Take the Oshawa plant, located just outside of Toronto: it was built in 1953 and is equipped to make just about every model GM sells.

Canadian Prime Minister Justin Trudeau tweeted:

And GM’s unions aren’t happy, either. In fact, the United Autoworkers union said they plan to fight the decision.

Terry Dittes, UAW vice president said, “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.”4 (How do you feel about buying American cars that are made in other countries? Do you believe American companies have an obligation to the American public?)

It remains to be seen whether or not GM will emerge as the automaking leader of the future; Alphabet (GOOGL), Apple (AAPL), Uber and Tesla (TSLA) are leading Silicon Valley’s push into the self-driving car’s market, too.