GM to stop production at 5 factories in the US and Canada

DETROIT – General Motors is closing factories in Canada, Ohio, Maryland and Michigan, and is downsizing by 15%, with a view to reducing costs, while the North American auto sector is expanding. waiting for a loss of speed.

As part of a company-wide restructuring announced Monday by the company, GM has announced plans to stop production at three assembly plants: the Lordstown Assembly in Warren, Ohio, Detroit-Hamtramck Assembly and the Oshawa Assembly in Otanario, Canada. It also plans to close transmission plants in White Marsh, Maryland, and Warren, Michigan, in 2019, the company said in a press release.

"The actions we take today continue to transform our society so that it is extremely agile, resilient and profitable, while leaving us the opportunity to invest in the future," he said. said Mary Barra, president and CEO of GM, in a statement. "We are aware of the need to keep up with changing market conditions and customer preferences in order to position our company for long-term success."

GM's shares soared after the news, up 7% late Monday morning.

In October, GM offered buybacks to 18,000 white-collar workers as part of a cost reduction initiative. The company aims to save $ 6.5 billion in "cost savings" by 2018. GM has not yet specified the number of workers who have accepted the buyout or, s & dquo; He is close to achieving staff reduction goals, he's set a goal to better withstand more difficult times.

Lower the costs

GM has been working in recent years to reduce costs, with a target of $ 6.5 billion reduction this year alone. According to GM's annual report, the company has reduced its hourly production by 4,000 people in 2017, in its factories. In June, the builder ended the second day of work at its plant in Lordstown, Ohio, with the removal of 1,500 workers.

The company's main competitor, Ford, said earlier this month that it would reduce its payroll workforce by the second quarter of 2019.

The Monday shutdown of GM's plant in Oshawa, Ontario, was confirmed for the first time late Sunday by the Associated Press, which quoted an official aware of the decision. The official spoke on condition of anonymity because they were not allowed to speak publicly before the announcement.

GM needs to reorganize the company to focus more on low-emission hybrid vehicles, a technology that is not at the forefront of the Canadian factory.

Too many GM factories are dedicated to manufacturing slow-moving cars and the company can no longer afford to keep them all running without making tough decisions. But the political atmosphere could limit realistic choices for the Detroit automaker.

Political Blowback?

Industry analysts are already preparing potential targets for GM, including the large plant in Lordstown, located in northeastern Ohio. The produced car is also built in Mexico. The once-busy factory has already lost two of its three shifts and 3,000 unionized jobs since the beginning of last year.

But moving this car, the Chevrolet Cruze, south of the border, may cause a brutal reaction from President Donald Trump. And GM does not know if it will really fight by imposing a 25% tariff on imported vehicles from Canada and Mexico.

What's more, Cruze's factory, located just outside Youngtown, is in a democratic, trade union stronghold, where Trump captured a surprising number of voters two years ago by addressing that he called the "forgotten men and women" of the United States.

At a rally near the factory last summer, Trump spoke of moving past large factories whose jobs "left Ohio," then ordered people to not not sell their house, because the jobs "come back, they all come back".

In total, GM has five unused car manufacturing plants in Kansas City, Kansas; Lordstown; and Detroit-Hamtramck, Lansing and Township of Orion, Michigan.

GM opened its plant in Oshawa, near Toronto, in 1953. This plant is used to manufacture Cadillac XTS and Chevrolet Impala sedans as well as Chevrolet Silverado and GMC Sierra trucks.

A spokesman for GM declined to comment. GM was expected to close factories due to sales difficulties.

Unifor, the largest private-sector union in Canada, said in a statement that it did not have detailed information on Monday's announcement, but it was informed that no product had been awarded to the Oshawa plant after December 2019.

"Based on the commitments made during the 2016 contract negotiations, Unifor does not accept this announcement and immediately calls GM to respect the spirit of this agreement," said the union in a statement posted on its website. website.

"Unifor must hold a discussion with General Motors (Monday) and will make further comments after the meeting."

Oshawa Mayor John Henry said he had not spoken to anyone about GM. Jennifer French, who represents Oshawa in the Legislative Assembly of the province, said she found the news "extremely worrying".

"If GM Canada is effectively turning its back on 100 years of industry and community – leaving workers and their families behind in Oshawa – this is a baseless decision that must be fought," she said. in a statement.