What Happened To General Motors?
On Monday, General Motors (GM), America’s largest automotive company, announced a major "restructuring" involving the closure of several plants and thousands of layoffs.
The plan will basically stop all car production by GM at plants in the U.S. and Canada, as the company expects to spend more than $3.8 billion reshaping their business.
Plants in Ohio, Michigan, Maryland, and Ontario, Canada are set to be "unallocated" (in GM’s terms) sometime in 2019.
Propulsion plants in Maryland and Michigan will also see production slow down, but GM did not release a firm timeline for these locations, or even say explicitly that they would close.
Along with the plant closures, cars that were made in those facilities, including the Chevrolet Volt, Impala, and Cruze, will no longer be produced.
Three plants outside of America, including one in South Korea, are also set to close by the end of 2019.
The company also announced plans to shrink its American workforce by 15%, leaving more than 14,000 current GM employees without jobs.
GM said the planned cuts will include 25% of its executives, about 8,100 administrative positions, and more than 6,000 factory jobs.
The company says the reorganization will save them around $6 billion annually by 2020.
The changes are part of an overall plan for GM to move away from car building, towards a focus on developing technology, including self-driving and electric vehicles.
How Have People Reacted?
Both President Trump and Canadian Prime Minister Justin Trudeau criticized GM for the decision.
“I am not happy,” Trump told reporters outside the White House on Monday. “You know, the United States saved General Motors. For [GM's CEO] to take that company out of Ohio is not good. I think she is going to put something back in soon.”
Trump was referring to a bailout provided by the federal government for GM in 2008.
The president also said he was pressuring GM CEO Mary Barra to "reopen" plants in America soon.
"We have a lot of pressure on them. You have senators and a lot of other people, a lot of pressure," the president said.
"Their car is not selling well. So they'll put something else -- I have no doubt that, in a not-too-distant future, they'll put something else. They better put something else in."
Trudeau criticized GM’s plan to shutter is car assembly plant in Oshawa, Ontario, tweeting that he had expressed his "deep disappointment" to Barra.
GM workers have been part of the heart and soul of Oshawa for generations - and we’ll do everything we can to help the families affected by this news get back on their feet. Yesterday, I spoke with @GM’s Mary Barra to express my deep disappointment in the closure.— Justin Trudeau (@JustinTrudeau) November 26, 2018
The United Auto Workers union also promised to use "every legal, contractual, and collective bargaining avenue" to resist the changes.
"This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce," said the union's vice president Terry Dittes.
What's Next For Workers Affected By The Plan?
In an attempt to cut costs, GM has already begun offering buyouts to employees.
The company also says that about half of the workers at plants set to close will be given the chance to relocate to another GM operation.
Actually closing the plant will involve negotiations with unions representing GM’s employees, who have called the plan "a slap in the face."
Workers at GM’s plant in Canada walked off the job on Monday following the announcement.
GM is not the only American automaker planning to cut jobs. Ford told investors in October to expect details of layoffs by the second quarter of 2019.
The news came after Ford announced in April it would stop producing sedans and hatchbacks in North America.