GM puts ax in factories and jobs

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 assembly plants will no longer receive replacement models. The company has closed, said Monday the largest US automaker.

Two combustion technology plants are also endangered. A total of 8,000 employees, or 15% of the workforce, are expected to leave the company, but a quarter of management positions are eliminated. "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.

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 $ 1 billion, the government said. Barra did not associate 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 sedans are out – SUVs and electric cars in

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. Next year, the US Hamtramck / Michigan and Lordstown / Ohio plants, which have already been reduced to a one-team operation, will be shut down. In all three locations, the group's models evolve like the Chevrolet Cruze, Cadillac CT6 and Buick LaCrosse – they are abandoned. In addition, two assembly plants outside North America are nearing completion for two unnamed individuals. Two training units will no longer work from 2020 and are also threatened with closure.

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 classic 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%.

General Motors plans to save $ 6 billion a year by the end of 2020, announced the former parent company Opel. The cost is expected to decrease by $ 4.5 billion and the investment will be reduced from $ 8.5 to $ 7 billion a year. This is possible because investments in new trucks and trucks are already complete, Barra said. The cost of GM's restructuring is estimated to be between $ 3.0 billion and $ 3.8 billion, mainly in this quarter and next. 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.

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