GM to slash 14,700 jobs in North America

GM to slash 14,700 jobs in North America

GM to slash 14,700 jobs in North America

Its shares rallied 7.6 percent to $38.66.

The General Motors Hamtramck Assembly plant in MI and Lordstown Assembly plant in OH are being "unallocated" in 2019 as a part of a major company restructuring.

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

GM isn't the first to abandon much of its vehicle market. Also affected are transmission factories in Warren, Mich., as well as Baltimore. Two of the plants made engines and parts for those cars.

Chief executive Mary Barra said the company must keep pace with the trend for electric and self-driving cars and that GM was still hiring people in those fields.

Steve Rattner, the head of former President Obama's auto task force who oversaw the GM and Chrysler bailouts, said the announcement shouldn't be construed as a violation of the bailout agreement because the industry has changed and the companies need to be able to adapt.

Sources tell 680 NEWS that GM is set to announce it will be phasing out operations over the course of the next year at the plant, which dates back to 1918.

In a statement, Detroit Mayor Mike Duggan described the news as "troubling" and said that the city's economic development team and the UAW union are "working together to come up with a solution that works for GM and the employees".

In Canada, Prime Minster Justin Trudeau expressed "deep disappointment" with the plant closure. GM said the cuts will boost automotive free cash flow by US$6 billion by the end of 2020 and result in one-time charges of up to US$3.8 billion in the fourth quarter of this year and first quarter of 2019.

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"Actions are being taken to reduce salaried and salaried contract staff by 15 percent, which includes 25 percent fewer executives to streamline decision making", GM said. Barra said the industry is changing rapidly and moving toward electric propulsion, autonomous vehicles and ride-sharing, and GM must adjust.

Youngtown is in a Democratic and labor stronghold, where President Donald Trump won over a surprising number of voters two years ago because of his promise to bring work back to the U.S.

Meanwhile, GM's plant in Oshawa, Ontario, will stop making the Impala, Cadillac XTS and 2018 full-size pickups in the fourth quarter of next year.

Cost pressures on GM and other automakers and suppliers have increased as demand waned for traditional sedans.

"Contributing to the cash savings of approximately $6 billion are cost reductions of $4.5 billion and a lower capital expenditure annual run rate of nearly $1.5 billion", GM said in a statement.

The Hamtramck and Lordstown assembly plants are now operating on one shift. "They are not closing our damn plant without one hell of a fight". Consultancy LMC estimates that Lordstown will operate at just 31 percent of production capacity in 2018.

She also said the company remains committed to its facilities in OH, despite the closure of the Lordstown plant, with six other locations and 4,000 employees, as well has hundreds of suppliers and dealers. Fiat Chrysler Automobiles got out of small and midsize cars two years ago, while Ford announced plans to shed all cars but the Mustang sports auto in the U.S.in the coming years. Ford (F) announced in April it would just about end all production of sedans in North America.

The industry-wide slowdown in passenger auto sales worsened in 2017. Some U.S. factory workers could transfer to truck or SUV factories that are increasing production.

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