Published: Tue, November 27, 2018
Business | By Eloise Houston

GM Closing Lordstown Plant In 2019, Cutting Thousands Of Jobs

GM Closing Lordstown Plant In 2019, Cutting Thousands Of Jobs

Donald Trump said he had told the company's boss he is unhappy about the move - which runs counter to the U.S. economy's strong job growth.

The United Autoworkers union said it would fight the decision.

Costs for automakers could escalate even further under the United States-Canada-Mexico Agreement, which raises the thresholds on the amount of parts and raw materials in a vehicle that must come from North American sources and places a requirement on the amount of production that must be done by workers earning at least US$16 an hour, Lovely said. The automaker said it planned to lay off 14,000 workers and close seven factories.

GM, the largest automaker in the US and includes the Chevrolet, Buick, Cadillac and GMC brands, said the moves will save $6 billion in cash by the end of next year, including $4.5 billion in recurring annual cost reductions and a $1.5 billion reduction in capital spending.

In total, GM's North American salaried workforce will shrink by 15 percent (8,000 jobs).

"Trade headwinds" and, in particular, Trump's tariffs of 25 per cent on imported steel and 10 per cent on aluminum, have also been identified as a key business challenge by more than one automaker as they attempt to make hard transitions in their product lines and operations. At GM's Detroit headquarters on Monday, there were signs directing people to a "new hire orientation" meeting.

The Monday closure of GM's plant in Oshawa, Ontario, was confirmed late Sunday by an official familiar with the decision. That means GM needs to allocate more resources to purely electric cars, unlike the hybrid Volt, and to autonomous technology, Barra said.

Barra said GM is still hiring people with expertise in software and electric and autonomous vehicles, and many of those who will lose their jobs are now working on conventional cars with internal combustion engines.

But the single largest batch of job cuts by a US automaker in 17 years wasn't greeted as grim news by shareholders. Sales of the compact vehicle were down 27 percent through September, GM said. Through the first nine months of 2018, that had fallen to a little over 31 percent.

The compact Cruze is the only vehicle built in Lordstown. GM has several plants running well below that, and Barra said North American operations overall were operating at 70 percent capacity.

Through the UAW, workers at Lordstown have worked to improve quality, cut the number of union locals to make it easier for GM to negotiate and agreed to the outsourcing of some jobs, in a bid to persuade the automaker to add more models to its factory line.

Ohio Congressman Tim Ryan called for Congressional hearings into the plant closures Monday. "I implore President Trump to keep his word when he came to the Mahoning Valley past year and promised jobs were 'all coming back, '" wrote Ryan in a statement. Fiat Chrysler Automobiles got out of small and midsize cars two years ago, while Ford announced plans to shed all cars but the Mustang sports auto in the USA in the coming years. US sales of the Impala were down 13 percent through September.

America's largest auto maker said some workers would transfer to SUV and truck factories, which are increasing their output because of growing demand.

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