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As part of the global restructuring, General Motors announced Monday the reduction of its North American production and its employees and executives.
The Detroit-based automaker said it would not hand over any production to the Oshawa meeting in Ontario, the Lordstown meeting in Ohio and the Detroit-Hamtramck meeting in Michigan after December 2019. It will cease also to award production to the propulsion plants of White Marsh, Maryland, and Warren, Mich., after December 2019.
These changes are part of GM's efforts to focus its resources on autonomous and electric vehicles, as well as more efficient trucks, crossovers and SUVs, the company said in a statement.
The company also announced a reduction of 15% of its workforce and 25% of its leaders to "streamline the decision-making process". GM has also announced the closure of two plants outside of North America by the end of 2019. These sites have yet to be announced.
"The actions we take today continue our transformation to become very agile, resilient and profitable, while leaving us the opportunity to invest in the future," said Mary Barra, Executive Director in a statement. "We recognize the need to keep up with changing market conditions and customer preferences in order to position our company for long-term success.
Wall Street applauded the news, as GM's stock rose more than 7% as a result of the announcement.
The company said it hoped to save $ 6 billion in cash as part of the restructuring. Cost reduction is crucial to GM's aggressive strategy with efficient and electric vehicles, said Michelle Krebs, analyst at AutoTrader.
"GM is making a big bet on an autonomous, connected and electric future," said Krebs. "It must be extremely profitable now to finance this because no one knows when these vehicles will be commonplace."
Ohio Sens. Rob Portman (right) and Sherrod Brown (right), however, criticized GM's decision to shut down the Lordstown plant, shaming the company for the mistreatment of its workers.
"GM needs answers from the community about the consequences of the rest of the supply chain and the consequences of its disastrous decision," Brown said. tweeted on Monday.
Congressman Tim Ryan, who represents Lordstown in the 13th district of Ohio, also accused President Trump of losing his job, noting that he had promised the workers in the area that all jobs would come back to him. during his visit last year.
"The Valley aspires for the Trump administration to come here, roll up their sleeves and help us fight for this recovery," Ryan said in a statement released on Monday. "What we got instead are unkept promises and little tweets. Companies like General Motors and the president himself are the only ones to benefit from this economy. "
GM has been looking for ways to reduce costs as sales have declined in recent years in two of its most critical markets: China and the United States. In October, he offered buybacks to 18,000 employees, reported Dow Jones. Last year, we showed signs of a first sustained slowdown since the global financial crisis: US auto sales fell about 1% in 2017, according to Kelley Blue Book. Continued declines in new car purchases have disrupted automakers, particularly as they face a technology that may reshape the industry and prepare for the impact of the Trump administration's trade conflict.
When President Trump announced prices last summer, Detroit's three major automakers – GM, Ford and Fiat Chrysler – all reduced their profit forecasts for the rest of the year, citing rising commodity prices. which would result in higher prices and lower manufacturing costs. GM has taken a firm stance, warning of the benefits of the auto sector and saying that tariffs could "undermine GM's competitiveness with foreign automakers by erecting large trade barriers that add to our overall costs," commented Commerce Department in June.
GM was one of the few major US companies not to benefit immediately from last year's tax reduction law because it had stockpiled "deferred tax assets" resulting from its stormy performance in the period that preceded the financial crisis 10 years ago. These deferred tax assets allowed GM to already pay a reduced tax bill each year, but the new law made these deferred tax assets less valuable. Nevertheless, GM executives had said the company hoped to benefit from the new tax law in the future, although some analysts said it could take several years.
Rumors about the plant 's closure spread when Canadian union Unifor said in a statement Sunday night that the group had learned that no product would be expected for the plant from the beginning. Assembly of Oshawa, which is the headquarters of GM Canada, in December 2019. The factory has been open for 65 years and employs approximately 2,500 people.
"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," Unifor said in its statement.
Uncertainty was imminent before the official announcement, workers having quit work in protest, reported CTV News.
"There are people screaming in the eye, we can not get an answer," a man told CTV News.
GM did not specify whether the hourly workers of the five plants would be affected.
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