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GM To Stop Producing Some Models, Cut Jobs In North America


11/26/2018


GM To Stop Producing Some Models, Cut Jobs In North America
In what is the largest restructuring in the company in its North American unit of General Motors since it faced bankruptcy about a decade back, the US car manufacturer is set to reduce production, bring an end to making a number of its slow-selling models, and reduction of the workforce in the market.
 
Car assembly plants at Lordstown, Ohio, Hamtramck, Michigan, and Oshawa, Ontario would see a halt in production starting next year. A number of models of the company including the Chevrolet Cruze, the Cadillac CT6 and the Buick LaCrosse brands would be stopped to be manufactured.
 
The savings made through this process would be invested by the company in the development of electric and autonomous vehicles.
 
The company will discuss the issue in length next year with the United Auto Workers union. The plans were revealed on Monday by GM Chief Executive Officer Mary Barra.
 
“We are right sizing capacity for the realities of the marketplace” CEO Mary Barra said, adding that significant trends and change in the global auto industry had prompted the cuts. .  
 
There has been a decline in the demand for traditional sedans which has increased cost pressures on automakers and their suppliers including GM. The company had suffered losses of $1 billion because of the import tariffs imposed on steel by the Donald Trump administration earlier this year, GM said.
 
It had been informed by GM that the company would not allocate any production orders to the plant in Oshawa after December 2019, said a Canadian union, Unifor which is the union that comprises of the most unionized auto workers in Canada.
 
There are 2500 union staff members in Oshawa who are also employees of GM. The plant there manufactures both the Chevrolet Impala and Cadillac XTS sedans as well as completing of the final assembly of the stronger-selling Silverado and Sierra pickup trucks.
 
According to industry experts, the path of transition from production of traditional vehicles to championing new age vehicles – electric and automated vehicles, will be a long and expensive one. Moreover, many of the new age vehicles would be shared instead of being owned.
 
A number of auto makers in the US have dropped to single shifts as has been the case at the Hamtramck and Lordstown, assembly plant of GM.
 
According to an established norm in the automotive industry, it is assumed that a plant would be losing out money if it is unable to operate below 80 percent of production capacity.  There are a number of plants of GM that are functioning well below that level. Lordstown will operate at just 31 percent of production capacity in 2018, according to estimates of Consultancy LMC.
 
U.S. car production has been curtailed by both rivals of GM - Ford Motor Co and Fiat Chrysler Automobiles NV.
 
(Source:www.reuters.com)