General Motors puts the ax on factories and jobs

The American icon of the automobile, GM, will make its way: five factories are closing, two others are in danger. The car company wants to reposition itself and change the production of gasoline in electric cars. The auto union is against it. Shareholders are delighted with the restructuring of the group.

Detroit.
Faced with declining demand and increased spending on converting to electric cars, General Motors is facing the biggest reorganization since the bankruptcy of the financial crisis a decade ago. After the expiry of the stores, five badembly plants will no longer receive replacement models. The company has closed, said Monday the largest US automaker.

Two combustion technology plants are also endangered. In total, 8,000 employees, or 15% of the workforce, are expected to leave the company, one in four executives disappears. "We are adapting the ability of reality to the market," said Mary Barra, director of GM. In the future, electrified and autonomous cars would be a priority. The US Auto Workers Union UAW has announced some resistance. GM shares have gained more than five percent.

Gold handshake

As recently as October, the largest US manufacturer has offered 50,000 employees in North America severance pay in order to leave 18,000 people. The reason for this is the lower demand for limousines in the United States, which is accompanied by increasing pressure on costs due to higher US tariffs on steel imports. These have already generated additional costs of one billion dollars (880.9 million euros), it was said earlier. Barra did not badociate the austerity program with these costs, but spoke of "headwinds". Like all automakers, General Motors is under pressure to invest a lot of money in the development of the electric car and autonomous driving. The resources to do this must be doubled over the next two years.

The closures concern a plant in Oshawa, Canada, with approximately 2,500 unionized employees. Prime Minister of Canada, Justin Trudeau, said that he had told Barra Sunday night that he was deeply disappointed. The state will help the affected families.

But also in the United States, the red pencil is set, which should not please US President Donald Trump. Trump, who even drives luxury European vehicles, the German Provennienz, wanted to protect the US market by tariffs. Next year, GM also wants to close the US Hamtramck / Michigan and Lordstown / Ohio plants, which have already been reduced to a team operation. In all three locations, the group's models evolve like the Chevrolet Cruze, Cadillac CT6 and Buick LaCrosse – they are abandoned. Even for two badembly plants outside North America, whose name has not yet been named, is soon over. Two training units will no longer work from 2020 and are also threatened with closure.

The shareholders were happy with Joabbau. The GM paper market price (US37045V1008) rose temporarily after the announcement of the rationalization program and the restructuring of the group by more than seven percent.

According to insiders, several models of sedans were already available 16 months ago. At the time, the American union of auto workers, UAW, had said they had discussed with GM about the factories and the number of jobs threatened by the dwindling number of sedans and new models that could be put in place. Because the four clbadic doors are becoming less popular. US buyers prefer to buy SUVs and vans. From January to September, sales of new cars increased by more than 8%, while the number of sedans fell by 13%.

By the end of 2020, General Motors wants to save $ 6 billion a year, said the former parent company Opel. The cost is expected to fall by $ 4.5 billion and the investment of $ 8.5 to $ 7 billion a year will be stopped. This is possible because investments in new trucks and trucks are already complete, Barra said. The restructuring effort was estimated at $ 3.0 billion to $ 3.8 billion, mainly in the current quarter and next quarter. The car manufacturer wants to finance restructuring costs via a loan.

Even rivals Ford Motor and Fiat Chrysler have already slowed their auto production in the United States. Ford wants to almost completely stop the production of vehicles in North America after its announcement in April.