GM will stop building cars at 3 North American factories and cut its salaried workforce by 15% in 2019 as it shifts to electric and self-driving cars (GM)
- GM announced Monday that it will idle three factories in North America.
- The automaker said that it will shift resources to investing in electric and autonomous vehicles.
- GM is also rightsizing its manufacturing capacity ahead of a possible economic downturn or recession.
General Motors announced on Monday that it will stop building vehicles at three factories in North America in 2019.
According to the automaker, Oshawa Assembly in Oshawa, Ontario, Canada; Detroit-Hamtramck Assembly in Detroit; and Lordstown Assembly in Warren, Ohio will each be “deallocated” by the end of 2019 as GM both reorganizes its manufacturing capacity to focus on electric and self-driving vehicles, and prepares for a downturn in the auto market or a weakening on the US economy.
Each factory is either entirely or mostly devoted to passenger car production, and those vehicles have seen a collapse in consumer demand amid a shift to crossover SUVs and pickup trucks. Lordstown, in particular, builds a single, slow-selling sedan, the Chevy Cruze, as has been operating on just a single shift.
In a conference call with reporters to announce the moves, CEO Mary Barra said that idling the plants would ensure that GM remains “agile, resilient, and profitable.”
She added that the largest US automaker is “taking these actions now while the company and economy are strong, to stay ahead of fast-changing industry and market conditions.”
The three factories employ thousands of workers whose fates are unclear as the Detroit automaker head into a contract negotiation with the United Auto Workers.
Globally, GM is also reducing the size of its total workforce, including white-collar staff.
“Actions are being taken to reduce salaried and salaried contract staff by 15 percent, which includes 25 percent fewer executives to streamline decision making,” the company said in a statement.