General Motors Announces Multiple Plant Closures, Cost Cuts

The reports were true, with General Motors confirming that the Oshawa Assembly in Ontario, Canada “will be unallocated in 2019” along with Detroit-Hamtramck Assembly in Detroit and Lordstown Assembly in Warren, Ohio. As if that wasn’t bad enough, the automaker plans to reduce “salaried and salaried contract staff by 15 percent,” including 25 percent fewer executive positions to streamline decision making.
GM Oshawa 1 photo
Photo: General Motors
Chief executive officer Mary Barra claims “these actions will increase the long-term profit and cash generation potential of the company and improve resilience through the cycle.” General Motors plans cost reductions of $4.5 billion and a lower capital expenditure annual run rate of $1.5 billion by the end of 2020, but the question is, what for?

Even though the biggest of the Big Three in Detroit isn’t running out of greenback as it did in 2009, General Motors wants to allocate these resources “to electric and autonomous vehicle programs” which will double in the next two years. Increasing component sharing across the portfolio is one of those solutions, which isn’t news considering that badge-engineering is in the character of GM.

Along with the three plants mentioned at the beginning of the article, General Motors will also discard the Baltimore Operations in White Marsh, Maryland and Warren Transmission Operations in Michigan. The Gunsan plant in South Korea will be closed too, along with “two additional plants outside North America” by the end of 2019.

To save face from the media and workers that will be left without a job, Barra also mentioned that General Motors added shifts and invested “$6.6 billion in U.S. plants that have created or maintained 17,600 jobs.” Another reason for these closures is the changing demand amongst retail customers, which transitioned from conventional cars to crossovers, sport utility vehicles, and pickup trucks.

Sedan sales are falling harder than ever, and not even one automaker in the United States can expect a growth in this segment for the foreseeable future. Be that as it may, Toyota has just taken the veil off the new Corolla Sedan.
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About the author: Mircea Panait
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After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
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