General Motors said to plan closure of major Ontario operation

General Motors said to plan closure of major Ontario operation

GM is reinventing itself. Its cutting 15% of its salaried workers and shutting 5 plants in North America

DETROIT (AP) — General Motors will cut up to 14,000 workers in North America and put five plants up for possible closure as it abandons many of its car models and restructures to focus more on autonomous and electric vehicles, the automaker announced Monday.

The restructuring reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. In October, almost 65 percent of new vehicles sold in the U.S. were trucks or SUVs. That figure was about 50 percent cars just five years ago.

New York (CNN Business)General Motors on Monday announced a major restructuring of its global business, saying it will shut production at five facilities in North America and slash its staff. GM will reduce its salaried workforce by 15%, including a quarter of the companys executives.

GM to cut as many as 15,000 US, Canadian jobs, may close 5 plants | TheHill

GM is shedding cars largely because it doesnt make money on them, Citi analyst Itay Michaeli wrote in a note to investors.

“We estimate sedans operate at a significant loss, hence the need for classic restructuring,” he wrote.

“If GM Canada is indeed turning its back on 100 years of industry and community ― abandoning workers and families in Oshawa ― then this is a callous decision that must be fought,” she told the network. “Words cannot fully describe the anxiety that my community is feeling at this moment.”

The reduction includes about 8,000 white-collar employees, or 15 percent of GMs North American white-collar workforce. Some will take buyouts while others will be laid off.

At the factories, around 3,300 blue-collar workers could lose jobs in Canada and another 2,600 in the U.S., but some U.S. workers could transfer to truck or SUV factories that are increasing production.

When the federal and provincial governments bailed out the auto industry in 2009 at a time when bankruptcy appeared imminent, the deal required the Big Three to keep 16 per cent of its North American production in Canada ― a requirement that ended in 2016.

The company also said it will stop operating two additional factories outside North America by the end of next year, in addition to a previously announced plant closure in Gunsan, South Korea.

“Extremely concerned about reports regarding potential closure of GM Canada Oshawa operations,” Durham MP Erin O’Toole tweeted Sunday night. He said he and neighbouring Oshawa MP Colin Carrie were “reaching out for information.”

General Motors Co.s pre-emptive strike to get leaner before the next downturn likely will be followed by Ford Motor Co., which has said it is restructuring and will lay off an unspecified number of white-collar workers. Toyota Motor Corp. also has discussed cutting costs, even though its building a new assembly plant in Alabama.

GM said the closures, which will also affect four U.S. factories, are part of a broader shift toward electric and autonomous vehicles. “It’s obviously an extremely tough day for us but it is nevertheless important and exciting to be in a company that wants to lead in electric and autonomous and, like many industries that are transforming, if you don’t take bold steps you risk a much bigger dislocation,” Paterson said.

GM Reportedly Plans to Close Its Factory in Oshawa, Canada, Leaving 2500 Jobless

GM isnt the first to abandon much of its car market. Fiat Chrysler Automobiles got out of small and midsize cars two years ago, while Ford announced plans to shed all cars but the Mustang sports car in the U.S. in the coming years.

GM said the closures, which will also affect four U.S. factories, are part of a broader shift toward electric and autonomous vehicles. “It’s obviously an extremely tough day for us but it is nevertheless important and exciting to be in a company that wants to lead in electric and autonomous and, like many industries that are transforming, if you don’t take bold steps you risk a much bigger dislocation,” Paterson said.

Shares of GM, the largest automaker in the U.S. which sells the Chevrolet, Buick, Cadillac and GMC brands, rose nearly 6 percent on the news to $37.98 in Monday afternoon trading.

The car history runs deep in Oshawa. Robert McLaughlin and his sons Sam and George started making McLaughlin cars there in 1908 before selling to GM in 1918. The Detroit carmaker then opened its own plant in 1953, with production boosted by the 1965 auto pact that allowed cars to be shipped more easily to the U.S. market. In the 1980s the three plants produced as many as 730,000 cars and trucks a year, and employed about 23,000 people.

GM doesnt foresee an economic downturn and is making the cuts “to get in front of it while the company is strong and while the economy is strong,” CEO Mary Barra told reporters.

Video: GM plant in Oshawa set to shut down

She also noted that tariffs on imported aluminum and steel have hit the company, but she stopped short of saying they had anything to do with the restructuring.

About 970,000 Americans worked in the United States auto industry in October, an increase of 12,800 since Mr. Trump took office in January 2017. Most of that growth, however, came in one corner of the industry, manufacturers of recreational vehicles and trailers. Makers of auto parts have added about 2,000 jobs during that time. But through October, automakers like G.M. had cut about 7,000 jobs under Mr. Trump, government figures show. (Those numbers dont include the hundreds of thousands of workers employed by auto dealers, repair shops and related industries.)

Canadian officials call GMs move to close plant, cut 2,500 jobs callous

After the morning announcement, Barra was to head for Washington to meet with White House economic adviser Larry Kudlow in what was described as a previously scheduled meeting, according to a White House official who spoke on condition of anonymity because the official is not authorized to discuss the meeting publicly.

The plants include three car factories: one in Lordstown, Ohio, that makes the Chevrolet Cruze compact; the Detroit-Hamtramck plant, where the Chevrolet Volt, Buick LaCrosse and Cadillac CT6 are produced; and a plant in Oshawa, Ontario, which primarily makes the Chevrolet Impala. In addition, the company will halt operations at transmission plants in the Baltimore area and in Warren, Mich.

GM workers in Oshawa walk out in protest of plant closure – Autoblog

Trump said he was being tough on Barra. He said he told the company that the U.S. has done a lot for GM and that if its cars arent selling, the company needs to produce ones that will.

Although Canada and the province of Ontario took part in the G.M. rescue after its bankruptcy filing and have repeatedly helped fund improvements to the Oshawa plant, Canadian political leaders offered little hope that they could reverse the companys decision. Doug Ford, the premier of Ontario, said a G.M. official had told him, The ship has already left the dock.

BREAKING: General Motors Canada Set To Close Oshawa Operations

At a rally near Lordstown, Ohio, plant last summer, Trump told people not to sell their homes because the jobs are “coming back. Theyre all coming back.”

Most of the factories to be affected by GMs restructuring build cars that will not be sold in the U.S. after next year. They could close or they could get different vehicles to build. Their futures will be part of contract talks with the United Auto Workers union next year.

GM slashing jobs, killing car models and idling factories

The Detroit-based union has already condemned GMs actions and threatened to fight them “through every legal, contractual and collective bargaining avenue open to our membership.”

Factories that dont have any products after next year and could be closed include assembly plants in Detroit and Oshawa, Ontario, and Lordstown, Ohio, as well as transmission plants in Warren, Michigan, and near Baltimore.

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, GM Chairman and CEO Mary Barra said in an official statement. We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.

Bobbi Marsh, who has worked assembling the Chevrolet Cruze compact car at the Ohio plant since 2008, said she cant understand why the factory might close given the strong economy.

General Motors to close Detroit, Ohio, Canada plants

She now faces an uncertain future, not knowing whether the plant will close for good or if theres a chance it could find another use.

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“Everything is up in the air,” she said. “I dont want to give up hope for this facility and these people. I spend more time around them than my own family. It would be like breaking up a family.”

Unifor, a union, which represents workers at the GM plant, said in a statement that it received a notification from GM about an upcoming major announcement regarding the Oshawa plant, which is to take place on 26 November. Unifor doesnt know the details of the announcement, but noted that no product production has been planned at the plant beyond December 2019. The union promised to comment further on the matter, once it obtains all the details during the meeting with GM representatives, planned on the same day as the announcement.

Democratic Sen. Sherrod Brown said the move will be disastrous for the region around Youngstown, Ohio, east of Cleveland, where GM is one of the areas few remaining industrial anchors.

“GM received record tax breaks as a result of the GOPs tax bill last year, and has eliminated jobs instead of using that tax windfall to invest in American workers,” he said in a statement.

Many of those who will lose jobs are now working on conventional cars with internal combustion engines. Barra said the industry is changing rapidly and moving toward electric propulsion, autonomous vehicles and ride-sharing, and GM must adjust.

Among the facilities on the chopping block are the Detroit/Hamtramck assembly plant, which makes the Buick LaCrosse, the Chevrolet Impala and Volt, and the Cadillac CT6, all slow-selling cars. LaCrosse and Chevrolet Volt plug-in hybrid production will end March 1, while CT6 and Impala production would stop June 1.

Work on six-speed transmissions made at the Warren, Michigan, transmission plant would stop Aug. 1, while the Baltimore transmission plant would stop production April 1, GM said.

The closure dealt a blow to an industry which has struggled to attract new investment in recent years. However, the new trade agreement struck by the United States, Mexico and Canada in September leaves significant room for Canadian plants to grow exports duty-free. USMCA, as the new NAFTA is called, is expected to be formally signed this week.

GM said it was ending Volt production because the vehicle was meant to be a bridge to fully electric cars when it was introduced about a decade ago. The Volt has a small battery that can take it about 50 miles, then it switches to a small gasoline engine.

TORONTO/MONTREAL (Reuters) – Hundreds of workers walked off the job and Canadian Prime Minister Justin Trudeau expressed “deep disappointment” after General Motors Co on Monday announced the closure of its Oshawa plant, catching governments and employees by surprise.

Since it was introduced, battery technology has improved dramatically. Now the full-electric Chevrolet Bolt can go up to 238 miles on a single charge.

Meanwhile, GMs plant in Oshawa, Ontario, will stop making the Impala, Cadillac XTS and 2018 full-size pickups in the fourth quarter of next year. The Canadian plant appeared to be most in danger of closing.

Matt Smith has worked at the Oshawa plant for 12 years, and his wife also works at the facility. They have an 11-month-old at home.

“I dont know how Im going to feed my family,” he said outside of the plants south gate, where workers instituted a blockade for trucks from the entrance. “Its hard, its horrible.”

GM builds full-size Chevrolet and GMC pickups in Mexico, and it recently announced that a new Chevrolet Blazer SUV will be built there. Also, GM imports the Buick Envision midsize SUV from China.

Associated Press writers Rob Gillies in Toronto, John Seewer in Toledo, Ohio, and Zeke Miller in Washington contributed to this report.


Posted in Ontario