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GM slashing 15% of its salaried workers in North America

28 November 2018
GM slashing 15% of its salaried workers in North America

President Trump had a simple suggestion for General Motors, which is looking to lay off thousands of works and possibly put plants up for closure in order to focus on the production of electronic vehicles: "Make a better auto". He says he told the company that the US has done a lot for GM and that if its cars aren't selling, the company needs to produce ones that will. Barra is also shifting resources toward building electric cars and, eventually, vehicles that drive themselves.

The company has "unallocated" production from three vehicle factories (Oshawa, Detroit-Hamtramck and Lordstown), and two engine and transmission plants (Baltimore and Warren) after 2019. Also at risk are two transmission plants, one outside Detroit and another in Baltimore.

But its outlook is bleak after GM announced production of the Chevy Cruze would stop in March, halting work at the assembly plant that already had lost two shifts and 3,000 union jobs since the beginning of previous year.

Steve Rattner, the head of former President Obama's auto task force who oversaw the GM and Chrysler bailouts, said the announcement shouldn't be construed as a violation of the bailout agreement because the industry has changed and the companies need to be able to adapt.

CNN reports that the "company said the plan would make it more efficient, saving $6 billion a year by the end of 2020".

"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", said GM Chairman and CEO Mary Barra in a statement.

The union drove GM into bankruptcy once before and would do so again. They are working together to come up with a solution that works for GM and the employees.

Consultancy LMC estimates that Lordstown will operate at just 31 percent of production capacity this year. He said the decision to halt sales of the Chevrolet Cruze had "nothing to do with tariffs" but was because of poor sales.

If Lordstown doesn't get a new product, Green says he and other UAW members who can't relocate will collect unemployment.

During its third-quarter earnings report last month, General Motors said it had benefited over $150 million in tax savings so far in 2018 from the GOP tax reform legislation passed a year ago.

GM, according to its contract with Unifor, must give a year notice regarding a plant closure.

GM expects to record pre-tax charges of $3 billion to $3.8 billion related to the announced actions, including $2 billion of employee-related and other cash-based expenses and $1.8 billion in non-cash accelerated asset write-downs and pension charges. But this huge tax break has failed to save thousands of GM workers from cruel layoffs.

With US vehicle sales lagging, several auto plants have fallen to just one shift, including its Hamtramck and Lordstown assembly plants.

"We call on GM today, just as they called on all of us over a decade ago, please save our American jobs", UAW vice president Terry Dittes said.

GM isn't making money on cars. Trump said he told the company that the US has done a lot for GM and that if its cars aren't selling, the company needs to produce ones that will. The official spoke on condition of anonymity because they were not authorized to talk publicly ahead of Monday's announcement.