General Motors Announces the Closure of Seven Mills to Survive

General Motors (GM) has announced the closure of seven production plants worldwide and the elimination of several sedan models in North America, which will directly affect some 14,500 workers, measures it has described as necessary to guarantee its future.

GM has announced the closure of three badembly plants in North America (the Canadian company Oshawa and the Americans of Detroit-Hamtramck and Lordstown) and two engine production and transmission plants in the United States ( Baltimore and Warren).

Although these five plants are not technically closed, they will cease operations in 2019 and will not be affected by production. GM did not specify in its statement whether any of the 14,500 affected employees of these factories in North America could remain in the company in other production plants.

At the end of next year, the auto giant will cancel the production of two other factories outside North America, on which it has not given more details, as it will shortly ( see section And then?).

These closures are being added to the already known Gunsan badembly plant in South Korea.

The company also said that "measures are being taken to reduce" the workforce by 15%, a percentage comprising "25% fewer executives to speed up decision making".

The closure of the seven plants will cost GM between $ 3,000 and $ 3,800 million, but the company has announced a saving of about $ 6,000 million by the end of 2020.

Most of the costs will be targeted in the fourth quarter of 2018 and the first quarter of 2019, although GM has warned that it could result in additional costs next year.

Following the announcement, GM shares gained about 5.5%, or $ 1.95, to trade at $ 37.86 at noon.

The disappearance of these plants will also result in the cessation of production in the United States and Canada of many of the company's most clbadic models: Chevrolet Volt, Cruze and Impala sedans.

The company said it would give priority to "future vehicle investments in its new generations of electric vehicle architectures" and hopes that by the beginning of the next decade, "more than 75% of sales GM's global markets will come from five vehicle architectures ".

GM President and Chief Executive Officer Mary Barra, said that "these shares will increase the long-term benefits and the cash-generating potential, which will further enhance the company's strong liquidity position".