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General Motors announced Monday that it planned to decommission five factories in North America and remove several thousand blue-collar and salaried jobs in order to cut costs.
The move follows similar job-cutting measures by Ford Motor, faced with slowing sales and changing consumer tastes, due in part to low gas prices.
The five G.M. factories will stop production next year, resulting in the dismissal of 3,300 production workers in the United States and 3,000 in Canada. The company also aims to reduce its salaried staff by 8,000.
"We are taking this step now, as society and the economy are strong to stay out of changing market conditions," said Mary T. Barra, chief executive of G.M., during a conference call.
The factories include three automobile factories: one in Lordstown, Ohio, which makes the Chevrolet Cruze compact; the Detroit-Hamtramck factory, where the Chevrolet Volt, Buick LaCrosse and Cadillac CT6 are produced; and its plant in Oshawa, Ontario, which manufactures the Chevrolet Impala. In addition, transmission facilities in the Baltimore area and Warren, Michigan, are to be shut down.
Some of the affected mills could resume production, depending on the outcome of the contract negotiations with the United Auto Workers union next year.
Investors welcomed the news, sending the company's shares up more than 7% to their highest level since mid-July.
In recent years, with gasoline prices remaining low, consumers have been turning to larger and more spacious vehicles, such as pickup trucks and SUVs. The demand for small and medium cars has plummeted. Earlier this year, Ford declared that it would be stop making sedans for the North American market and announced a reduction in its workforce.
The companies also paid the price of the tariff battle triggered by President Trump. In June GM reduced its earnings outlook for the year because steel prices pushed up costs. The company does not import much steel to the United States, but the increased demand for domestic steel has pushed prices up.
Ms. Barra said G.M would set aside up to $ 2 billion in cash to pay for the job cuts and file an uncollected lawsuit against its pre-tax profit of about $ 1.8 billion. Expenses will affect the fourth quarter of 2018 and the first quarter of 2019.
Until last month, G.M. offered severance benefits to encourage salaried employees in North America to leave the company. In January, the company plans to remove white-collar jobs on an involuntary basis. Between the two actions, it aims to eliminate 8,000 salaried jobs, or about 15% of its employees in North America.
General Motors also announced Monday that it would stop production of two unspecified factories located outside of North America by the end of next year.
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