ANOTHER tRUMP FAILURE = General Motors will cut up to 14,000 workers in North America

[Yak]

DETROIT (AP) — General Motors will cut up to 14,000 workers in North
America and put five plants up for possible closure as it abandons many of
its car models and restructures to cut costs and focus more on autonomous
and electric vehicles.

The reduction includes about 8,000 white-collar employees, or 15 percent
of GM’s North American white-collar workforce. Some will take buyouts
while others will be laid off.

At the factories, around 3,300 blue-collar workers could lose jobs in
Canada and another 2,600 in the U.S., but some U.S. workers could transfer
to truck or SUV factories that are increasing production.

The company also said it will stop operating two additional factories
outside North America by the end of next year, in addition to a previously
announced plant closure in Gunsan, Korea.

The restructuring reflects the changing U.S. and North American auto
markets as a dramatic shift away from cars toward SUVs and trucks
continues. In October, almost 65 percent of new vehicles sold in the U.S.
were trucks or SUVs. It was about 50 percent cars just five years ago.

GM is shedding cars largely because it doesn’t make money on them, Citi
analyst Itay Michaeli wrote in a note to investors.

“We estimate sedans operate at a significant loss, hence the need for
classic restructuring,” he wrote.

General Motors Co.’s pre-emptive strike to get leaner before the next
downturn likely will be followed by Ford Motor Co., which has said it is
restructuring and will lay off an unspecified number of white-collar
workers. Toyota Motor Corp. also has discussed cutting costs, even though
it’s building a new assembly plant in Alabama.

GM isn’t the first to abandon much of its car market. Fiat Chrysler
Automobiles got out of small and midsize cars two years ago, while Ford
announced plans to shed all cars but the Mustang sports car in the U.S. in
the coming years.

Shares of GM, the largest automaker in the U.S. which sells the Chevrolet,
Buick, Cadillac and GMC brands, rose nearly 6 percent on the news to
$37.93 in midday trading Monday.

GM said the moves will save $6 billion in cash by the end of next year,
including $4.5 billion in recurring annual cost reductions and a $1.5
billion reduction in capital spending.

Those cuts are in addition to $6.5 billion that the company has announced
by the end of this year.

GM doesn’t foresee an economic downturn and is making the cuts “to get in
front of it while the company is strong and while the economy is strong,”
CEO Mary Barra told reporters.

She also noted that tariffs on imported aluminum and steel have hit the
company, but she stopped short of saying they had anything to do with the
restructuring.

If all the factory workers are laid off, the reductions announced Monday
would be about would be about 8 percent of GM’s global workforce of
180,000 employees.

The reductions could ripple through auto parts suppliers such as Aptiv and
Magna International, Michaeli said.

Many of those who will lose jobs are now working on conventional cars with
internal combustion engines. Barra said the industry is changing rapidly
and moving toward electric propulsion, autonomous vehicles and ride-
sharing, and GM must adjust.

She said GM is still hiring people with expertise in software and electric
and autonomous vehicles. The company has invested in newer architectures
for trucks and SUVs so it can cut capital spending while still raising
investment in autonomous and electric vehicles.

GM has offered buyouts to 18,000 retirement-eligible workers with a dozen
or more years of service. It would not say how many have accepted the
buyouts, but it was short of the company’s target because GM said there
will be white-collar layoffs.

The company expects to take a pretax charge of $3 billion to $3.8 billion
due to the actions, including up to $1.8 billion of asset write downs and
pension charges. The charges will take place in the fourth quarter of 2018
and the first quarter of next year.

Most of the factories to be affected by GM’s restructuring build cars that
won’t be sold in the U.S. after next year. They could close or they could
get different vehicles to build. Their futures will be part of contract
talks with the United Auto Workers union next year.

The Detroit-based union has already condemned GM’s actions and threatened
to fight them “through every legal, contractual and collective bargaining
avenue open to our membership.”

Among the possibilities on the chopping block are the Detroit/Hamtramck
assembly plant, which makes the Buick LaCrosse, the Chevrolet Impala and
Volt, and the Cadillac CT6, all slow-selling cars. LaCrosse and Volt
production will end March 1, while CT6 and Impala production would stop
June 1.

The plant in Lordstown, Ohio, which makes the Chevrolet Cruze compact car
also is on the list, and Barra said the Cruze would no longer be sold in
the U.S. Production would stop March 1.

Work on six-speed transmissions made at the Warren, Michigan, transmission
plant would stop Aug. 1, while the Baltimore transmission plant would stop
production April 1, GM said.

Meanwhile, GM’s plant in Oshawa, Ontario, will stop making the Impala,
Cadillac XTS and 2018 full-size pickups in the fourth quarter of next
year. The Canadian plant appeared to be most in danger of closing.

Ontario Premier Doug Ford said he talked to the head of GM on Sunday and
was told “the ship has already left the dock” when he asked if there was
anything Ontario could do.

Canadian Prime Minister Justin Trudeau said he spoke to Barra on Sunday to
express his “deep disappointment” with the closure.