Workers in Michigan and Ohio will find a rude surprise in their Christmas stockings, according to NBC. General Motors plans to cut as many as 14,700 jobs, both plant workers and executives, by the end of the year. The restructuring could result in as many as five plant closures — four in the US:
General Motors announced Monday it plans to slash 14,700 jobs — about 15 percent of its U.S. workforce — and possibly close up to five domestic plants.
The reduction in force includes 8,100 white-collar employees who’ll be targeted via buyouts and layoffs.
The Detroit Free Press reports that the cuts will take place on a somewhat smaller scale. GM will cut 5600 jobs and close three car assembly plants, two of which are in the US. These factories make models that sell in the US, although perhaps not the versions used for domestic sales:
General Motors will close three assembly plants by the end of 2019, it said Thursday, including Detroit-Hamtramck, Lordstown in Ohio and Oshawa in Ontario.
Approximately 5,600 jobs are at stake: roughly 1,500 in Hamtramck; 1,600 in Lordstown; and about 2,500 in Oshawa.
The Hamtramck plant makes the Chevrolet Volt and Impala, the Cadillac CT6 and the Buick LaCrosse.
So far there’s no word on whether these models will get eliminated, but the Free Press notes that GM has shifted its focus away from sedans. Trucks and SUVs have proven more popular, and anyone who’s been driving over the last few years knows that the latter has become ubiquitous on American roads. The Wall Street Journal reports, however, that the plan includes “phas[ing] out several car models over the next year,” which would suggest that sedan-producing plants have become expendable. Their report pegs American job losses at 8,000, including previously announced buyouts.
The Free Press hints at more bad news for American auto workers:
“For the first time in my memory, GM is leading the pack on tangible restructuring actions, and the dominoes are really starting to fall,” Jon Gabrielsen, an independent adviser to the auto industry. “This may not be the last plant closure for GM, and we have not yet seen Ford and FCA show their hands.”
While Ford is trimming its global white-collar workforce, it has said nothing about plant closures.
GM announced the specific plants to be “unallocated” next year:
- Assembly plants that will be unallocated in 2019 include:
- Oshawa Assembly in Oshawa, Ontario, Canada.
- Detroit-Hamtramck Assembly in Detroit.
- Lordstown Assembly in Warren, Ohio.
- Propulsion plants that will be unallocated in 2019 include:
- Baltimore Operations in White Marsh, Maryland.
- Warren Transmission Operations in Warren, Michigan.
“Unallocated” is certainly a creative word. Do they have a Doublespeak dictionary on hand for such occasions, or do they make these up as needed?
The politics of these closures will damage both parties, more than likely. Democrats led by Barack Obama went all-in on a government bailout and politically driven bankruptcy settlement for GM in 2009, which cost American taxpayers billions of dollars while protecting unions from the consequences of GM’s failures. More acute, however, will be Donald Trump’s claims on economic boom times as the American auto industry sheds jobs on a well, industrial scale. The job losses hit two states that Trump won in 2016, and which he needs to win re-election. Bet on that being the bigger and more immediate political issue as this unfolds.
As of this writing, Trump hasn’t yet addressed GM’s announcement. It won’t be long before he does.
Update: Still all quiet on the Trump Twitter front, but the White House has definitely taken an interest in this move:
JUST IN: GM CEO Mary Barra to meet with White House economic adviser Kudlow following job cut announcement – sources https://t.co/jTd66HlDxT
— Reuters (@Reuters) November 26, 2018
Barra had better prepare for a skeptical reception.