General Motors announced on Monday that it will lay off 15 percent of salaried workers and close five plants in the United States and Canada. The cuts will eliminate approximately 8,000 salaried workers, including 25 percent of executives, and an additional 6,000 hourly workers will either lose their jobs or be transferred, according to CNN.
The five plants that will close are the Oshawa Assembly in Ontario, Lordstown Assembly in Ohio, Detroit-Hamtramck Assembly in Michigan, Baltimore Operations in White Marsh, Maryland, and Warren Transmission Operations in Warren, Michigan. GM will also close two plants outside of North America, but those locations have not yet been announced. According to Huffington Post reporter Dave Jamieson, GM has set aside $2 billion to pay for layoffs and buyouts.
The restructuring, which will reportedly save the company $6 billion by 2020, will take the company’s focus off sedans, which have increasingly fallen out of favor in comparison to SUVs and hatchbacks. The plants closing either assembled or made parts for sedans; a couple of the facilities made trucks as well, but those trucks are also made in Mexico, according to CNN. Cars being discontinued include the Chevrolet Cruze, Volt, and Impala, along with the Buick LaCrosse, Cadillac XTS, and Cadillac CT6.
GM’s shuttering of plants is also a step toward its new focus on producing electric and autonomous vehicles; its new motto is “Zero Crashes, Zero Emissions, Zero Congestion.” In 2017, the company bought Cruise Automation, a San Francisco-based driverless car company. According to a press release, “resources allocated to electric and autonomous vehicle programs will double in the next two years.”
The exportation of work on small cars, like sedans, was a concern for some economists when the new US-Mexico-Canada trade bill was signed earlier this year. According to the Washington Post, there were also concerns “that automakers might not make as many cars in North America to export to China and elsewhere overseas because costs would be higher in the USMCA region than making the vehicles in Asia.”
The types of changes GM is making are not unique in the auto industry. In April, Ford announced it would end all production of sedans in North America. Newer companies such as Alphabet, Apple, Tesla, and Uber are also in the race, trying to build the cars of the future.
Sen. Sherrod Brown (D-OH) expressed his disappointment in GM’s decision, tweeting that “Ohio taxpayers rescued GM, and it’s shameful that the company is now abandoning the Mahoning Valley and laying off workers right before the holidays.”
GM owes the community answers on how the rest of the supply chain will be impacted & what consequences its disastrous decision will have on the Valley & Ohio. My office stands ready to do everything we can to help these workers. This decision is corporate greed at its worst. -SB
— Sherrod Brown (@SenSherrodBrown) November 26, 2018
Sen. Rob Portman (R-OH) tweeted similar sentiments, saying, “I’m disappointed w/ how the hardworking employees have been treated throughout this process.”
I’m deeply frustrated with @GM’ decision to shut down its plant in #Lordstown & I’m disappointed w/ how the hardworking employees have been treated throughout this process. https://t.co/wgIk8QAjmK
— Rob Portman (@senrobportman) November 26, 2018
Canadian Prime Minister Justin Trudeau tweeted that “GM workers have been part of the heart and soul of Oshawa for generations - and we’ll do everything we can to help the families affected by this news get back on their feet.”
GM workers have been part of the heart and soul of Oshawa for generations - and we’ll do everything we can to help the families affected by this news get back on their feet. Yesterday, I spoke with @GM’s Mary Barra to express my deep disappointment in the closure.
— Justin Trudeau (@JustinTrudeau) November 26, 2018
Unions from Canada and the US are also displeased. The Canadian union Unifor said it would not accept GM’s decision and that GM needs to live up to the “spirit of the agreement” made during 2016 contract negotiations. The plant in Oshawa has been open for 65 years and employs about 2,500 people.
The United Autoworkers Union chimed in, saying that GM’s decision “will not go unchallenged.” In a statement, Terry Dittes, UAW vice president and director of the UAW-GM Department, said, “This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce.”
The president of UAW, Gary Jones, also commented that “The practice of circumventing American labor in favor of moving production to nations that tolerate wages less than half of what our American brothers and sisters make, must stop.” The five plants mentioned in GM’s announcement are supposed to be unallocated in 2019.