GM to halt production at several plants, cut more than 14,000 jobs

[Acura604]

https://www.cnbc.com/2018/11/26/gm-u...-quarters.html

General Motors said Monday it plans to effectively halt production at a number of plants in the U.S. and Canada next year and cut more than 14,000 jobs in a massive restructuring that will cost up to $3.8 billion.

In response, the United Auto Workers vowed to use "every legal, contractual and collective bargaining avenue" to fight the changes.

U.S. President Donald Trump and Canadian Prime Minister Justin Trudeau also criticized the automaker's decision.

"I am not happy," Trump told reporters on the White House lawn Monday afternoon, speaking of CEO Mary Barra. "You know, the United States saved General Motors. For her to take that company out of Ohio is not good. I think she is going to put something back in soon."

Trudeau took to Twitter earlier in the day to express support for the workers at the Oshawa Car Assembly Plant, in Ontario. "Yesterday, I spoke with @ GM's Mary Barra to express my deep disappointment in the closure," he said. She met with National Economic Director Larry Kudlow at the White House hours after making the announcement.

The Detroit automaker said plants in Ohio, Michigan, Maryland, and Ontario will be "unallocated" in 2019 and it will cease operations at two additional plants outside of North America by the end of next year. It will also wind down operations at propulsion plants in White Marsh, Maryland, and Warren, Michigan.

Although the decision effectively shuts down those plants, the company wouldn't say outright that they are closing. Shuttering a plant is a matter of negotiation with the UAW, GM spokeswoman Stephanie Rice said in an email.

"We are announcing the cessation of certain products resulting in a number of plants being without allocated volume to produce," she said.

The company plans to cut 15 percent of its salaried workers, resulting in a 25 percent reduction of its executive ranks, the company said. The cuts will eliminate more than 14,000 jobs in all, roughly 8,100 white collar positions and more than 6,000 factory jobs, according to the company.

GM employed 180,000 people as of Dec. 31 — 77,000 of which were salaried, according to a regulatory filing. About 51,000 employees were represented by labor unions, including the UAW.

"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," said Terry Dittes, a UAW vice president who leads negotiations with GM.

The reorganization is estimated to save about $6 billion a year by the end of 2020, the company said. The company previously tried thinning its ranks through buyouts offered to some 18,000 eligible employees in October.

Former GM Vice Chairman Bob Lutz said the automaker historically would have raised sales incentives to try to sell more cars before resorting to plant closures.

"Nowadays GM looks at the hard reality, says we've got a demand problem on cars, what are we going to do about it. We have to shut some facilities and move production to truck plants," Lutz said on CNBC's "Halftime Report." "So I think what we are seeing is a fast-acting and reality-oriented GM management."

The largest U.S. automaker has invested heavily in crossovers, SUVs and trucks as consumer demand has shifted from traditional passenger cars. It is a move mirrored by decisions at several automakers, perhaps most notably Ford and Fiat-Chrysler. Ford has also said it plans to reduce its salaried workforce, telling investors Oct. 5 it will provide the details to those layoffs by the second quarter of next year.

"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," Barra said in a statement. "We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success."

Sam Huszczo, who owns SGH Wealth Management outside of Detroit, said many of his financial planning clients at GM told him they believe about 4,000 people with average salaries of around $120,000 already took buyouts offered last month.

About 2,250 people have already taken the voluntary buyouts, not 4,000, said spokeswoman Juli Huston-Rough. She declined to comment on their average salaries.

Trading in GM was briefly halted before the announcement. Its shares jumped as much as 7.8 percent in intraday trading.


https://electrek.co/2018/11/26/gm-ch...ric-investmet/

GM announced today a major restructuring that will involve “doubling” the company’s investment in electric and self-driving cars, but they will pay for it by shutting down factories and laying off thousands of workers.

The company has also confirmed that the Chevy Volt will be discontinued.


Similar to what Ford did earlier this year, GM says that it is moving away from sedans and it is instead focusing on “trucks, crossovers and SUVs.”

They now say that they will prioritize “investments in its next-generation battery-electric architectures”:

“GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures. As the current vehicle portfolio is optimized, it is expected that more than 75 percent of GM’s global sales volume will come from five vehicle architectures by early next decade.”

CEO Mary Barra said that it would result in doubling the company’s investment in electric vehicles and self-driving technology.

Last year, the company announced several new electric vehicles to launch in the next few years, including 5 crossovers, 2 minivans, 7 SUVs, and more.

The restructuring announced today is coming at a high cost for GM employees.

The company confirmed that they will be laying off almost 15,000 employees and closing down 5 factories (3 assembly plants and 2 powertrain plants):

Oshawa Assembly in Oshawa, Ontario, Canada.
Detroit-Hamtramck Assembly in Detroit.
Lordstown Assembly in Warren, Ohio.
Baltimore Operations in White Marsh, Maryland.
Warren Transmission Operations in Warren, Michigan.
These plants will stop operation next year and several vehicles that they make, like the Chevrolet Cruze, the Cadillac CT6 and the Buick LaCrosse, will be discontinued.

A GM spokesperson also confirmed to Electrek that Chevy Volt production will be discontinued by March 2019. Past rumors have indicated that a Crossover could replace the Volt, though that was considered to be years out.

Electrek’s Take
It’s a sad day for many families out there. Good jobs are going away.

I appreciate GM increasing its investment in electric vehicles, but what they are announcing today on that front is very vague while the layoffs are very concrete.

I wish that they would have instead invested in converting those plants to electric vehicle production like Volkswagen is doing in Europe.

Though I might have an idea of who could use one or two of those factories and workforce.

I remember a little company called Tesla taking over a shuttered GM plant in California and it turned out OK. More on that later.

As for the Chevy Volt, I liked the 2019 version, but we kind of knew the end was coming. The vehicle had a good run and it certainly helped in the transition to fully electric vehicles. As with the Bolt, Chevy could have done a lot better with the Volt if it had increased its marketing and trained its dealerships better.

-Fred Lambert/ ELECTREK.CO

[twitchyzero]

GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures. As the current vehicle portfolio is optimized, it is expected that more than 75 percent of GM’s global sales volume will come from five vehicle architectures by early next decade

seems like a timely response to those asking how BC can go fully electric on the road by 2030

looking forward to seeing some electric crossoverfs, sorry if that's too cookie-cutter for yall V8 fans

[AstulzerRZD]

Seems like Ford was a couple months ahead on cancelling their passenger cars.

No surprise as interest towards them declines and the Japanese continue to increase their market share in those segments. Those who need to own a vehicle for utility and flexibility will continue to buy SUVs and trucks.

For the urban city dwellers who don't, I expect in a couple years that GM and Ford will each launch mobility services to cover these users with a focus on electrification.

I expect to see...

1) Subscription services that lease PHEVs or range extended EVs on a month to month basis. Care by Volvo and other subscription models are trial runs to learn and get infrastructure setup within the company.

2) Fleets of electric AVs or shuttles routed by AI that will deliver users either to their destination or to point 3. OnStar + Maven infrastructure + whatever they're building will likely be adapted for fleet management.

3) eScooters/eBikes also owned by the company for last mile transport. GM is planning an eBike for sale, while Ford bought a scooter sharing company.

4) Some focus on in vehicle services while being delivered to a destination (entertainment, ads, grocery shopping, etc). GM has already started displaying ads on infotainment.

5) Trials or launches of these new business models in Europe, where there are more smart city projects, congestion chargers from driving yourself into the city, and city centers are starting to ban vehicles from city centers.

6) Urban dealerships will remain for high end products (i.e. luxury watches generally bought in store). Suburban dealerships will likely help with fleet management/service (but rental companies might also take over this role).

Cancelling production and discontinuing vehicles likely needed reduce capital and operating expenses so that they make this shift.

The unknown to me is when we'll see consolidation of V2V and city to vehicle communication protocols.

[westopher]

2008? Is that you?
Outlook is not good here.

[welfare]

So the bailouts were just a big waste of taxpayer money?

[GS8]

One of my cars has an Oshawa sticker on it.

In Engrish.

[twitchyzero]

[westopher]

Do we really expect giant corporations to put employee interests before profits just because we handed them some taxpayer money? Just like those corporate tax cuts are working so well for the American working class.
Sorry guys, thats not how it works.

[tiger_handheld]

Do we still own GM stock as tax payers?

[welfare]

Originally Posted by westopher

Do we really expect giant corporations to put employee interests before profits just because we handed them some taxpayer money? Just like those corporate tax cuts are working so well for the American working class.
Sorry guys, thats not how it works.

That's one of the reasons they caved in 08.
The fat pension plans and benefits that were negotiated over the years had come home to roost.
They were paying ridiculous amounts of money out on those plans

[Jmac]

Originally Posted by tiger_handheld

Do we still own GM stock as tax payers?

No, the Conservatives sold the stocks in 2015.

[320icar]

Originally Posted by westopher

Do we really expect giant corporations to put employee interests before profits just because we handed them some taxpayer money? Just like those corporate tax cuts are working so well for the American working class.
Sorry guys, thats not how it works.

So where’s the bailout for ICBC

[westopher]

Originally Posted by welfare

That's one of the reasons they caved in 08.
The fat pension plans and benefits that were negotiated over the years had come home to roost.
They were paying ridiculous amounts of money out on those plans

Its funny, because generationally, people who were taken care of the most, are telling people now, how they shouldn't expect to be taken care of by anyone.

[westopher]

Originally Posted by 320icar

So where’s the bailout for ICBC

I'd much rather a crown corporation burn my money than a private one, although I'd prefer neither to do so.

[welfare]

Originally Posted by westopher

Its funny, because generationally, people who were taken care of the most, are telling people now, how they shouldn't expect to be taken care of by anyone.

Oh don't worry. those boomers will probably be around to feel it. unsustainable pension costs definitely aren't exclusive to gm.

Originally Posted by westopher

I'd much rather a crown corporation burn my money than a private one, although I'd prefer neither to do so.

Agreed. Should never have been a bailout to begin with. From either country

[twitchyzero]

YouTube

[Great68]

I'm getting the sense that blame is being placed on the employees for the "unsustainable pensions" tanking the companies.

It's a benefit of employment and the the companies agreed to provide it. It's not the employees' fault the company couldn't perform and manage their finances well enough to account for it.

It'd be like the company I work for now going under and then blaming all us employees for taking them up on the RRSP matching program for causing it?

[quasi]

Originally Posted by Great68

I'm getting the sense that blame is being placed on the employees for the "unsustainable pensions" tanking the companies.

It's a benefit of employment and the the companies agreed to provide it. It's not the employees' fault the company couldn't perform and manage their finances well enough to account for it.

It'd be like the company I work for now going under and then blaming all us employees for taking them up on the RRSP matching program for causing it?

I agree to a point but I wonder if it has anything to do with automation and improvements in technology making it cheaper and easier to build the cars?

Say they build a more atomized plant in Mexico that can be operated by less skilled labor making less money what's the benefit to paying a high wage with a huge benefit plan to other workers? They still have to compete with the other auto manufactures and provide vehicles at the lowest price possible to get as much market share as they can.

Remember when all the projectionists went on strike for like a year because they wanted to roll back their pay because changes in technology allowed them to have a 16 year old kid with minimal training do the same job? They sat out for a year until eventually they all moved on and were let go and it was all due to changes in technology.

I'm not blaming the employees for getting theirs but at the end of the day the bottom line really is the only thing that matters in business. You can try and be accommodating take less profits to keep your employees happy but eventually there is a tipping point where you go from black to red. The owner of our company really cares about his employees and does everything he can to keep us employed, heck he owns at least 5 different companies with 700+ employees and I get a call from him weekly to see how I'm doing but rest assured if we lose to much money over a long period of time he'll just shut down our office, he's done it in other locations in western Canada and honestly I don't blame him.

[AstulzerRZD]

Originally Posted by quasi

Say they build a more atomized plant in Mexico that can be operated by less skilled labor making less money what's the benefit to paying a high wage with a huge benefit plan to other workers?

I'm not blaming the employees for getting theirs but at the end of the day the bottom line really is the only thing that matters in business.

Couple points here....

1) Need to be careful of too much automation in vehicle assembly > there are certain precise movements that really require a human to do. GM tried it in the 80s, Tesla tried it with the Model 3 rampup... both gave up and went back to relying largely on humans

2) The bottom line is what's at stake here - sedan's aren't selling, and plants need to operate at high volume to reduce the fixed cost per unit. GM and Ford also need a shit ton of money to electrify and build mobility solutions for city dwellers.

[quasi]

Originally Posted by AstulzerRZD

Couple points here....

1) Need to be careful of too much automation in vehicle assembly > there are certain precise movements that really require a human to do. GM tried it in the 80s, Tesla tried it with the Model 3 rampup... both gave up and went back to relying largely on humans

2) The bottom line is what's at stake here - sedan's aren't selling, and plants need to operate at high volume to reduce the fixed cost per unit. GM and Ford also need a shit ton of money to electrify and build mobility solutions for city dwellers.

I agree, looked what happened to Tesla. That said machines and new technology can still simplify some tasks.

Take my job for example, I read blueprints and cost construction projects 25 years ago it was done entirely by hand printing out drawings, taking off quantities with a ruler and using a calculator and notepads to cost them. Now it's all computerized, no money spent on printing drawings for bidding which means less business for the printers. There is still a need for someone knowledgeable with construction practices and blueprints to operate the computer and do the work but it's so much quicker now. The guy who trained me was still old school 5 years ago, with less experience I was at least 50% quicker than he was at doing the same job.

I guarantee there have been similar advances in manufacturing vehicles without making the entire thing automated.

[freakshow]

Originally Posted by Great68

I'm getting the sense that blame is being placed on the employees for the "unsustainable pensions" tanking the companies.

I don't get that feeling at all.. I don't think anyone is mad at the individual employees receiving pension, they're mad at the use of tax payer dollars to pay out those pensions. GM should have been left to be sold for parts.

If the pensions are in a crown corp, then again, I don't get the sense that anyone is mad at each individual, but they're mad at the unions and bureaucracy that allow for it to happen plus the fact that we seem to be powerless to let something as ridiculous as public pensions continue.

[westopher]

I’m curious what the salaries and bonuses last year of the top 3 earners at GM would equate to in average workers pensions over the next 5 years.

[twitchyzero]

gov'ts and taxpayers just feels shafted...that the inevitable was only delayed

what if you work or supply parts to FCA and Toyota in North America right now? If I was on the assembly line building anything but a xover/truck/suv i sure as shit would be frantically looking for another job.

[welfare]

Originally Posted by freakshow

I don't get that feeling at all.. I don't think anyone is mad at the individual employees receiving pension, they're mad at the use of tax payer dollars to pay out those pensions. GM should have been left to be sold for parts.

If the pensions are in a crown corp, then again, I don't get the sense that anyone is mad at each individual, but they're mad at the unions and bureaucracy that allow for it to happen plus the fact that we seem to be powerless to let something as ridiculous as public pensions continue.

There's a great book on this
https://www.amazon.ca/Crash-Course-A.../dp/0812980751

Chronicling the emergence,from Henry Ford and Dodge brothers, all the way to 2012 after the bailouts.
Outlines some of the horrible mismanagement, and completely insane deals brokered by the UAW. Especially from GM.

There's a really great chapter on Honda in it as well. Some of the practices they took when opening their auto plant in Ohio, the first Japanese plant to build cars in the US.

The COO fervently opposed the union. He knew the divisive nature of them. They ran that plant like a family. Unlike the US makers whose workers were kept completely segregated from the executives, The Honda execs and workers ate in the same lunchrooms, used the same washrooms, and wore the same clothes.
They listened to the workers input on improvements and rewarded it.
That type of relationship was unheard of amongst American makers. And never would have been possible with a union.

Always had love for Honda engineering. But after learning about the history of their company, and the way they ran it, it really renewed my admiration.

But anyways, excellent book. Literally couldn't put it down.

[BaoTurbo]

Trump seems to fit in this picture as well...hmm....