GM To Fire 15% Of Salaried Workers, Close 7 Plants
by Tyler Durden
ZeroHedge.com
Mon, 11/26/2018
Update II: The cutbacks announced by GM Monday morning were more severe than most analysts expected – and were certainly steeper than leaked reports published late Sunday and early Monday had suggested.
After GM shares were halted pending news following a 2%+ jump after the open, Barra revealed that the company would shutter 7 plants (5 in North America and 2 international) after 2019, fire 15% of its salaried workforce and shift hiring priorities to more tech workers in a cost-cutting drive intended to save the company some $6 billion by the end of 2020 ($4.5 billion will come from cost savings, $1.5 billion from lower capital spending). As GM seeks more workers with “different skills”, it also plans to shift its investment focus toward electric and autonomous vehicles.
Canadian Prime Minister Justin Trudeau has expressed “deep disappointment” at GM’s decision to close its plant in Oshawa, Ontario. He reportedly spoke with Barra over the weekend.
The company’s shares ripped higher after the trading halt ended, climbing 7.6% in their strongest one-day jump since Oct. 31, when the company announced some of its cost cutting plans and said it expected EPS for 2018 toward the high end of its guidance.
Here’s a quick rundown of the closures:
1. Oshawa Assembly in Oshawa, Ontario, Canada.
2. Detroit-Hamtramck Assembly in Detroit.
3. Lordstown Assembly in Warren, Ohio.
4. Baltimore Operations in White Marsh, Maryland.
5. Warren Transmission Operations in Warren, Michigan.
6/7. In addition to the previously announced closure of the assembly plant in Gunsan, Korea, GM will cease the operations of two additional plants outside North America by the end of 2019.
Barra said the cutbacks are a response to sagging car sales in domestic and international markets (sedan sales have floundered while pickup truck sales remain robust) and the impact of Trump’s trade war. The steel tariffs alone have already cost GM some $1 billion this year, the company said.
“We are taking this action now while the company and the economy are strong to keep ahead of changing market conditions,” Barra said during a conference call with reporters.
The Rest…HERE
