WASHINGTON — General Motors announced today that it plans to close five North American plants and cut 15 percent of its salaried workforce in response to market changes.
In comments filed with the Commerce Department in June, the automaker warned the administration that President Trump’s broad steel tariffs could “lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less – not more – U.S. jobs.”
The company has said the additional tariffs have cost GM more than $1 billion. The streamlining changes announced today are expected to increase the firm’s cash flow by $6 billion by the end of 2020.
The assembly plants pegged for closure are Oshawa Assembly in Oshawa, Ontario, Canada, Detroit-Hamtramck Assembly in Detroit, and Lordstown Assembly in Warren, Ohio. Propulsion plants targeted are Baltimore Operations in White Marsh, Md., and Warren Transmission Operations in Warren, Mich. Layoffs would amount to 14,700 jobs.
“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,” GM Chairman and CEO Mary Barra, who was a member of Trump’s now-defunct economic advisory council, said in a statement. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
GM will also prioritize electric car development and concentrate on five models that account for three-quarters of the automaker’s sales. “The company is transforming its global workforce to ensure it has the right skill sets for today and the future, while driving efficiencies through the utilization of best-in-class tools. Actions are being taken to reduce salaried and salaried contract staff by 15 percent, which includes 25 percent fewer executives to streamline decision making,” GM said.
Trump has not yet responded to the announcement, but he encouraged a boycott of Harley-Davidson after the motorcycle company said it was moving some production overseas because of the tariffs.
“Most other companies are coming in our direction, including Harley competitors. A really bad move! U.S. will soon have a level playing field, or better,” Trump tweeted in August.
United Auto Workers Vice President and Director of the GM Department Terry Dittes said said the “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.”
“GM’s production decisions, in light of employee concessions during the economic downturn and a taxpayer bailout from bankruptcy, puts profits before the working families of this country whose personal sacrifices stood with GM during those dark days,” Dittes said. “These decisions are a slap in the face to the memory and recall of that historical American made bailout.”
The union said it will “confront this decision by GM through every legal, contractual and collective bargaining avenue open to our membership.”