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The company would lay off about 10,000 workers as it prepared for a possible slowdown in the United States and tariff increases.
General Motors ended yesterday months of transcendence and speculation about a possible restructuring of its business. confirming that it will close at least five plants in the United States and Canada due to uncertainty surrounding the global economy and its own shift to electric and autonomous vehicles.
"We make these decisions as long as the economic situation is robust." Mary Barra, CEO of the company, told reporters. "This industry is changing very quickly and we want to be sure we are well positioned, and we think it's appropriate to do it at a time when the company is strong and the economy is strong as well. "
The executive added that she envisioned" very difficult contexts "in the future, with reference to a possible slowdown in the US economy, her main market. . Sales of the entire industry in the world's largest economy have been declining since 2016 and could close this year under the threshold of 17 million new units. In China, the second most important country for GM activity, activity also declined.
The company also admitted the uncertainty in the commercial arena, when rates were crossed between the two largest economies on the planet. They worried investors. GM has ensured that Washington 's imposed taxes on steel and aluminum imports have already increased their costs by about one billion US dollars.
The company, the largest automaker in the United States, will close four sites in Detroit, Baltimore and Ohio next year, plus one in the Canadian city of Ontario. In total, the measure will involve the firing of 8,000 to 10,000 workers, including a quarter of its executive surface, which aims to make the decision-making process more efficient.
By the end of 2019, the company is also evaluating closing two other sites in other parts of the world, which adds to the announced closure before its badembly plant in Gunsan, South Korea. In Latin America, the company has offices in Mexico and Brazil.
The announcement of the restructuring was well received by investors, who punished the company during the year. GM shares jumped 7.9% yesterday to $ 38.75, their highest price since July.
Adapting to the Times
The announced changes aim to reduce GM's costs by approximately US $ 4,500 million, in addition to reducing investment expenses about 1,500 million US dollars a year.
The company will also stop building some of its models (Buick LaCrosse, Chevrolet Cruze and Cadillac CT6, among others) as it focuses on the development and production of electric vehicles and autonomous driving. This implies that he could beef up his GM Cruise equipment, the unit responsible for developing driverless cars. Over the past year, this service, based in San Francisco, has increased by about 1,000 workers.
But society's adaptation efforts have not been celebrated by everyone. Trump said yesterday that he had spoken with Barra stating that "we were putting a lot of pressure" so that the factories are not closed, some of which are in areas relevant to the President's Victory in 2016.
Meanwhile, Canadian Prime Minister Justin Trudeau said on Twitter that he had expressed his "deep disappointment" to GM's CEO following the closure of the company. plant in Oshawa, Ontario, which has 65 years of history and about 2,200 workers. It is the penultimate factory of the company in this country. The last, in Toronto, is likely to be transferred to Mexico. The authorities added that "we will do everything in our power to help the affected families get up".
Detroit Mayor Mike Duggan said in a statement that GM's decision was "disturbing". and that the city "is willing to occupy all available space for manufacturing with entities related to GM or with other companies."
The moment of the industry
Ten years after the financial crisis that led to many US auto industry is facing a new scenario of uncertainty due to technological changes and consumption, the growing shift to electric and autonomous automobiles and shared mobility.
Other major American companies are also bankrupt. They announced dramatic measures this year. Ford announced in April that it would drastically reduce its sedan production and its goal is to reduce annual costs by $ 25 billion by 2022.
"New car sales are hitting higher interest rates and higher costs "Jonathan Smoke, Chief Economist of Cox Automotive, told FT. "Historically, major purchases such as homes and cars tend to decline before a recession.The era during which historically low interest rates boosted record sales officially ended," did he declare.
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