G.M. to Idle Plants and Cut Thousands of Jobs as Sales Slow

General Motors mentioned Monday that it deliberate to idle 5 factories in North America and minimize greater than 14,000 blue-collar and salaried jobs in a bid to trim prices.

The motion follows comparable job-cutting strikes by Ford Motor within the face of slowing gross sales and a shift in client tastes, pushed partially by low gasoline costs.

The 5 G.M. crops will halt manufacturing subsequent yr, ensuing within the layoff of three,300 manufacturing employees within the United States and about three,000 in Canada. The firm additionally goals to trim its salaried employees by eight,000.

“We are taking this action now while the company and the economy are strong to keep ahead of changing market conditions,” Mary T. Barra, G.M.’s chief government, mentioned in a convention name.

The crops embrace three automobile factories: one in Lordstown, Ohio, that makes the Chevrolet Cruze compact; the Detroit-Hamtramck plant, the place the Chevrolet Volt, Buick LaCrosse and Cadillac CT6 are produced; and a plant in Oshawa, Ontario, which primarily makes the Chevrolet Impala. In addition, the corporate will halt operations at transmission crops within the Baltimore space and in Warren, Mich.

Some of the affected crops may resume manufacturing, relying on the end result of contract negotiations with the United Auto Workers union subsequent yr.

The cuts drew fireplace on Monday from President Trump, who vowed early in his term to increase automaking jobs and brought pressure on the industry not to shift work to Mexico and overseas.

Referring to Ms. Barra, he said: “I spoke with her when I heard they were closing and I said, you know, this country has done a lot for General Motors. They better get back to Ohio and soon.”

He also invoked the government’s rescue of G.M. after its bankruptcy filing almost a decade ago. “You know, the United States saved General Motors,” he told reporters, “and for her to take that company out of Ohio is not good. I think she’s going to put something back in soon.”

The cutbacks also drew protests in Canada. Within an hour of G.M.’s announcement, workers walked out of the Oshawa plant into a driving rain. Waving red flags and clad in ponchos bearing the logo of their union, Unifor, they began blockading truck entrances.

Prime Minister Justin Trudeau said he had expressed his “deep disappointment” about the closing to Ms. Barra. He added that the government is looking at measures to help jobless G.M. workers “get back on their feet.”

But investors welcomed the news, sending the company’s shares up about 5 percent to their highest level since July.

For the last several years, as gas prices have remained low, consumers have gravitated toward bigger, roomier vehicles like pickup trucks and sport-utility vehicles. Demand for small and midsize cars has plunged. Earlier this year, Ford said it would stop making sedans for the North American market and announced cuts in its work force.

The companies have also paid a price for the tariff battle that Mr. Trump set in motion. In June G.M. slashed its profit outlook for the year because tariffs on steel were driving up its costs. The company does not import a great deal of steel into the United States, but the increased demand for domestic steel has raised prices.

Ms. Barra said G.M. would set aside up to $2 billion in cash to pay for the job reductions, and take noncash charges against its pretax earnings of about $1.8 billion. The charges will affect earnings in the fourth quarter of 2018 and the first quarter of 2019.

Until last month, G.M. had been offering severance packages to entice salaried employees in North America to leave the company. In January, the company plans to cut additional white-collar jobs on an involuntary basis. Between the two actions, it aims to eliminate 8,000 salaried jobs, or about 15 percent of its white-collar workers in North America.

The U.A.W. is preparing to negotiate new contracts with G.M., Ford and Fiat Chrysler next year. In recent years, the union has agreed to concessions in exchange for promises by the manufacturers to keep plants open.

The union said G.M.’s move on Monday “will not go unchallenged.” Closing American plants while expanding production in China and Mexico is “profoundly damaging to our American work force,” said the union vice president in charge of negotiations with G.M., Terry Dittes.

Over all, the auto industry has added nearly 350,000 jobs since the industry bottomed out in the wake of the Great Recession, with most of that growth coming under President Barack Obama. But the industry still employs tens of thousands fewer people than before the crisis, and hundreds of thousands fewer than in 2000.

About 970,000 Americans worked in the United States auto industry in October, an increase of 12,800 since Mr. Trump took office in January 2017. Most of that growth, however, came in one corner of the industry, manufacturers of recreational vehicles and trailers. Makers of auto parts have added about 2,000 jobs during that time. But through October, automakers like G.M. had cut about 7,000 jobs under Mr. Trump, government figures show. (Those numbers don’t include the hundreds of thousands of workers employed by auto dealers, repair shops and related industries.)

The cutbacks in Canada were particularly sensitive because of politics, labor relations and history.

G.M. Canada is headquartered in Oshawa, an industrial town east of Toronto, where it was founded in 1907 by a wagon maker who licensed Chevrolet designs. Before a series of cutbacks started in the 1980s, its factories and engineering centers in Oshawa employed upward of 40,000 people.

G.M. was the largest vehicle producer in Canada until it was eclipsed by Toyota last year. An overwhelming majority of cars and trucks made in that country are exported to the United States.

Although Canada and the province of Ontario took part in the G.M. rescue after its bankruptcy filing and have repeatedly helped fund improvements to the Oshawa plant, Canadian political leaders offered little hope that they could reverse the company’s decision. Doug Ford, the premier of Ontario, said a G.M. official had told him, “The ship has already left the dock.”

The future of the plant has appeared to be in jeopardy at points in the past. But optimism about its future was restored in 2016 when G.M. made a $554 million investment in the operation as part of its contract settlement with Unifor. Little of that sentiment was to be found on Monday.

“The last thing we want to do is walk off the line, we really don’t want to do that,” said Eva McKeen, an inspector in the plant’s paint shop. “We just want G.M. to work with us to — I don’t know. Just as you’re getting older, to know that you don’t have a job, it’s really heart wrenching.”

General Motors also said on Monday that it would stop production at two unspecified plants outside North America by the end of next year.

Source link Nytimes.com

Featured Advertisements


Leave a Reply

Your email address will not be published. Required fields are marked *

Featured Advertisements