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Posted at 11:45 AM ET 25 November 2018 |
Next year, General Motors Co. will close five plants, including two in the Detroit area, as part of a restructuring plan that, according to the builder, will save $ 6 billion by 2020.
Plants that will cease production next year are Detroit-Hamtramck, Warren Transmission, the Lordstown Assembly in Ohio, the Oshawa Assembly in Ontario, Canada, and the Baltimore facility in Maryland.
Plant closures will affect some 6,300 workers worldwide, including 3,300 in the United States. These workers will have the opportunity to move into GM's growth plants. The plants are considered "unallocated", which means that at that time, these plants have no product. The future of the factories will be finalized during the negotiations.
GM says factories that will cease production in 2019 will also mark the end of products made in this country.
Oshawa is the only plant to build the Cadillac XTS sedan. Detroit-Hamtramck and Oshawa are the only factories to build the Chevy Impala. Detroit-Hamtramck is also the only producer of Cadillac CT6, Chevy Volt or Buick LaCrosse. Lordstown only manufactures the Chevy Cruze sedan. The hatchback model is made in Mexico.
GM is also starting layoffs after a proposed buyback program last month failed to meet an undisclosed cost-cutting benchmark. Buybacks and layoffs will affect 8,000 North American employees and a number of global leaders. GM declined to indicate how many people took the buyout and how many will have to take an involuntary severance pay.
"Take these steps now that the economy and the industry are strong," Mary Barra, CEO told reporters after the announcement on Monday. Barra said GM was focusing on adapting to a "rapidly changing industry characterized by rapidly changing market conditions".
"We hope that the management team is committed to acting urgently," she said.
Cost reduction efforts of $ 6 billion in 2019 build on GM's cost reduction efforts started in 2015. The automaker has taken steps to cut costs by $ 6.5 billion since then, with efforts similar to those of the European market.
Twitter: @NoraNaughton
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