General Motors Is Cutting 15 Percent Of Salaried Workforce, Discontinuing Car Models

GM Chief Exec. Mary Barra speaks before a General Motors backdrop.
Bill Pugliano / Getty Images

General Motors has announced that it is setting off on a massive restructuring venture that will result in the closure of several factories, and the discontinuation of various car models that it produces, as the company makes a bid to shift its focus toward ride-sharing networks, electric cars, and self-driving vehicles. CNN reports that GM will also be slashing 15 percent of its salaried workforce in hand with the downsizing efforts.

“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” CEO Mary Barra said in a statement GM issued to the press about the decision. Barra would go on to add that executives project the overhaul will work in the interest of “right-sizing capacity for the realities of the marketplace.”

GM’s Baltimore Operations parts plant; its Detroit-Hamtramck Assembly plant; the Warren Transmission Operations plant the company runs in southeast Michigan; its Lordstown Assembly plant in northeast Ohio; and the Ontario-based Oshawa Assembly plant are among the facilities that USA Today confirms are on the chopping block for closure by the end of 2019.

In letting the five aforementioned locations go, GM will be simultaneously killing off a number of passenger car models, including the Chevrolet Volt, the Chevrolet Cruze, the Chevrolet Impala, the Buick LaCrosse, and the Cadillac XTS. North American sales of the Cadillac CT6 will also come to a halt, although the model will remain on the market in China.

While reports of some 8,000 workers being laid off have on one hand led to finger pointing toward steel tariffs resultant of President Trump’s trade wars, there are analysts who on the other hand believe it was only a matter of time before GM took action to adapt in light of a declining demand for traditional gas-powered sedans. It is projected that the efficiency gained by virtue of realignment will help save the company $6 billion by the end of 2020.

The news was apparently good enough for investors, with Bloomberg reporting that stocks shot up 5 percent following the announcement. However, it did not go over as well for the United Automobile Workers union. UAW vice president Terry Dittes has posed his opposition to the move by declaring that “General Motors’ decision today… will not go unchallenged by the UAW,” according to Reuters.

In light of the impact that GM’s withdrawal from its Oshawa location will have north of the border, Canadian Prime Minister Justin Trudeau has also come out lamenting the decision, tweeting, “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 ‘s Mary Barra to express my deep disappointment in the closure.”