GM is cutting five plants and 25% of its white collar workforce to deal with projected lower industry vehicle sales and changing tastes that have made sedans much less popular.
GM is cutting models, like this 2019 Buick LaCrosse sedan, and five plants to cope with decreasing industry sales, tariffs on steel and changing tastes that are leaving sedans gathering dust on dealer lots.
General Motors said today it is ending production next year at five of its plants including its last remaining plant in Detroit and its Lordstown plant in Ohio. The reasons: they largely make sedans, which U. S. car buyers are increasingly rejecting in favor of SUVs; and Trump era tariffs are creating headwinds and higher costs for the automaker.
Also on the chopping block is a parts plant in Maryland, a transmission plant in suburban Detroit, a Canadian plant in Oshawa Ontario and a plant in Korea. In all, GM is looking to cut 15% of its global workforce. All the moves are designed to save the company $6 billion in annual costs.
That GM is looking to cut thousands of jobs at a time when the economy is performing well indicates a few realities of the global economy and the future of mobility. Ford, too, is expected to announce huge job cuts this week.
-Many forecasters project that the U. S., the best markets for GM and Ford, could see annual sales fall to between 15 million and 15.5 million a year for the next five years or so because of an over-heated used car supply, as well as a decline in new-vehicle ownership among consumers 20-32.
-GM, like most other car companies, are readying their operations and employee headcount for a rise in mobility usage, rather than vehicle ownership–ride hailing services like Uber and Lyft; increasing moves to city centers where consumers don’t want to own vehicles; burgeoning businesses around autonomous driving fleets that will have costs competitive with car ownership. “We are right-sizing capacity for the realities of the marketplace,” Chief Executive Mary Barra said, adding that GM will double resources dedicated to electric and self-driving vehicles over the next two years.
