General Motors Says Cutting 15% Of Workforce To Save $6 Bn

Washington, (APP - UrduPoint / Pakistan Point News - 26th Nov, 2018 ) :In a massive restructuring, US auto giant General Motors announced Monday it would cut 15 percent of its workforce to save $6 billion and adapt to "changing market conditions." The moves include shuttering seven plants worldwide as the company responds to changing customer preferences and focuses on popular trucks and SUVs and increasingly on electric models.

GM will shutter three North American auto assembly plants next year: the Oshawa plan in Ontario, Canada; Hamtramck in Detroit, Michigan and Lordstown in Warren, Ohio.

In addition, it will close propulsion plants -- which produce batteries and transmissions -- in Baltimore, Maryland and Warren, Michigan, as well two more unidentified plants outside of North America. GM already had announced plans to cease operations at its Gunsan, Korea plant.

"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 CEO Mary 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." - 'Deep disappointment' - The job cuts from the current 180,000 GM workforce will included a 25 percent reduction in executive-level employees to "streamline decision making." The Canadian plant employs about 3,000 workers.

Trading in GM shares was halted just before the announcement.

Once it restarted 20 minutes later, prices jumped and continued rising, showing a gain of more than six percent to $38.25 around 1600 GMT.

As GM has been increasing its focus on highly popular trucks and SUVs it "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," the company said in a statement.

In an investor call, Barra said some GM cars would no longer be available in North America.

"We're evaluating the Chevrolet Cruze for other markets, but none would be shipped to the US," she said.

The restructuring follows a similar move by Ford to cut down on the number of models it manufactures.

Canada's Unifor labor union is due to hold a news conference later Monday.

Canadian Prime Minister Justin Trudeau said he had spoken to Barra on Sunday to express his "deep disappointment in the closure.""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," Trudeau said on Twitter.

Barra in the statement said the actions "will increase the long-term profit and cash generation potential of the company and improve resilience."