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November 26, 2018 01:00 AM

General Motors may close up to 5 plants in North American restructuring

Michael Wayland, Automotive News
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    General Motors photo
    General Motors Detroit-Hamtramck Assembly plant in Michigan is one of five facilities the auto maker plans to close by the end of 2019.

    DETROIT — General Motors Co. plans to cut its salaried workforce "significantly" and could close up to five plants in North America in 2019, including three assembly plants, as part of an overhaul of its operations.

    The auto maker said vehicle assembly plants in Lordstown, Ohio, Detroit-Hamtramck, Mich., and Oshawa, Ontario, will not be allocated any products beginning in 2019. Propulsion plants in Maryland and Michigan also will not be given any product.

    All of the products assembled at those three plants are expected to stop being produced by year-end 2019, GM said.

    GM said it expects the announced actions to contribute to $6 billion in annual cash savings by 2020, including $4.5 billion in cost reductions and $1.5 billion in lower capital expenditures. GM shares rose 2.2 percent to $36.72 in early trading on Nov. 26.

    Not allocating product doesn't mean the plants will close, but it puts their future and the jobs of roughly 6,300 hourly and salaried factory employees — 3,300 in the U.S. and 3,000 in Canada — at risk heading into contract negotiations with the United Auto Workers (UAW) in 2019 and Canadian union Unifor in 2020.

    GM also announced it will close two unidentified assembly plants outside of North America by year-end 2019 and restructure its salaried workforce.

    The salaried workforce restructuring includes cutting 15 percent of its 54,000 salaried employees in North America, including slashing global executives by 25 percent.

    It was expected that GM, which announced the overhaul Nov. 26, needed to address underutilization of its plants. The announcement comes ahead of negotiations with the UAW in 2019 and Unifor in 2020 is uncommon.

    GM represents 1 million of the 3.2 million units of underutilized capacity in the U.S. through October, according to the Center for Automotive Research.

    The manufacturing overhaul follows recent cost-cutting measures by GM such as offering buyouts to 18,000 salaried employees and exiting or restructuring unprofitable markets such as Europe and South Korea.

    Oshawa has two assembly lines — one for the low-volume Cadillac XTS and Chevrolet Impala while the truck line produces the light- and heavy-duty Chevrolet Silverado and GMC Sierra pickups. It employs 1,542, including 1,348 hourly union workers.

    Detroit-Hamtramck builds the Chevrolet Volt and Impala, Buick LaCrosse and Cadillac CT6. U.S. sales of the Impala were down 13 percent through September.

    Lordstown, which has dropped from three shifts to one in recent years, is the sole assembly site for the Chevrolet Cruze. Sales of the compact car were down 27 percent through September, GM said.

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