General Motors to cut 15% jobs, halt production in plants

General Motors (Photo Credit: Moneycontrol)
General Motors (Photo Credit: Moneycontrol)

General Motors (GM) on Monday said it would cut off 15 per cent of its salaried workers and cut production at a number of plants in the U.S. and Canada next year.

The plan, the global firm said, would affect more than 14,000 jobs in a massive restructuring that will cost up to $3.8 billion.

The automaker said plants in Ohio, Michigan, Maryland, and Ontario will be “unallocated” in 2019 and it will cease operations at two additional plants outside of North America by the end of next year.

The company said it will also wind down operations at propulsion plants in White Marsh, Maryland, and Warren, Michigan.

GM spokeswoman Stephanie Rice said: “We are announcing the cessation of certain products resulting in a number of plants being without allocated volume to produce.”

The 15 per cent of its salaried workers is projected to result in a 25 per cent reduction of its executive ranks, the company said.

The affected employees would include roughly 8,100 white collar workers and more than 6,000 factory workers, it added.

The new restructuring is estimated to save about $6 billion a year by the end of 2020, the company said.

Earlier in October, the company had tried thinning its ranks through buyouts offered to some 18,000 eligible employees.

As consumers’ demand shift from traditional passenger cars, automakers have also devised means of meeting demand and sustaining business models.

“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 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.”

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