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GM to lay off upwards of 14,000 workers; President Trump threatens punishment

This news story was published on November 27, 2018.
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DETROIT – General Motors said today it would close 5 production plants and shed nearly 14,000 workers to “accelerate its transformation” and in response, President Donald Trump promised punishment.

Tuesday, President Trump issued a statement saying he is “Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including for electric cars. General Motors made a big China bet years ago when they built plants there (and in Mexico) – don’t think that bet is going to pay off. I am here to protect America’s Workers!”

The statement was in response to General Motors announcing it “will accelerate its transformation for the future, building on the comprehensive strategy it laid out in 2015 to strengthen its core business, capitalize on the future of personal mobility and drive significant cost efficiencies.”

The rest of GM’s announcement is below:

Today, GM is continuing to take proactive steps to improve overall business performance including the reorganization of its global product development staffs, the realignment of its manufacturing capacity and a reduction of salaried workforce. These actions are expected to increase annual adjusted automotive free cash flow by $6 billion by year-end 2020 on a run-rate basis.

“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,” said GM Chairman and CEO Mary Barra. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”

Contributing to the cash savings of approximately $6 billion are cost reductions of $4.5 billion and a lower capital expenditure annual run rate of almost $1.5 billion. The actions include:

  • Transforming product development – GM is evolving its global product development workforce and processes to drive world-class levels of engineering in advanced technologies, and to improve quality and speed to market. Resources allocated to electric and autonomous vehicle programs will double in the next two years. Additional actions include:
    • Increasing high-quality component sharing across the portfolio, especially those not visible and perceptible to customers.
    • Expanding the use of virtual tools to lower development time and costs.
    • Integrating its vehicle and propulsion engineering teams.
    • Compressing its global product development campuses.
  • Optimizing product portfolio – GM has recently invested in newer, highly efficient vehicle architectures, especially in trucks, crossovers and SUVs. GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures. As the current vehicle portfolio is optimized, it is expected that more than 75 percent of GM’s global sales volume will come from five vehicle architectures by early next decade.
  • Increasing capacity utilization – In the past four years, GM has refocused capital and resources to support the growth of its crossovers, SUVs and trucks, adding shifts and investing $6.6 billion in U.S. plants that have created or maintained 17,600 jobs. With changing customer preferences in the U.S. and in response to market-related volume declines in cars, future products will be allocated to fewer plants 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.

In addition to the previously announced closure of the assembly plant in Gunsan, Korea, GM will cease the operations of two additional plants outside North America by the end of 2019.

These manufacturing actions are expected to significantly increase capacity utilization. To further enhance business performance, GM will continue working to improve other manufacturing costs, productivity and the competitiveness of wages and benefits.

  • Staffing transformation – 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.

Barra added, “These actions will increase the long-term profit and cash generation potential of the company and improve resilience through the cycle.”

GM expects to fund the restructuring costs through a new credit facility that will further improve the company’s strong liquidity position and enhance its financial flexibility.

GM expects to record pre-tax charges of $3.0 billion to $3.8 billion related to these actions, including up to $1.8 billion of non-cash accelerated asset write-downs and pension charges, and up to $2.0 billion of employee-related and other cash-based expenses. The majority of these charges will be considered special for EBIT-adjusted, EPS diluted-adjusted and adjusted automotive free cash flow purposes. The majority of these charges will be incurred in the fourth quarter of 2018 and first quarter of 2019, with some additional costs incurred through the remainder of 2019.

GM stock is up over 10% over the last 30 days.

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20 Responses to GM to lay off upwards of 14,000 workers; President Trump threatens punishment

  1. Anonymous Reply Report comment

    December 1, 2018 at 9:05 am

    Rumor has it the CEO of G.M. who was placed in her position by Obama was TOLD to shut down American plants by Democrats to make trump look bad. Plants in Mexico and China were not shut down.

  2. Anonymous Reply Report comment

    November 29, 2018 at 10:32 pm

    Chicken TAX!

  3. Anonymous Reply Report comment

    November 28, 2018 at 3:35 pm

    Making america tank again.

    • Anonymous Reply Report comment

      December 1, 2018 at 8:50 am

      How stupid! Only the crazy liberals would come up with this as all they care about is trashing everyone & everything!!

  4. Anonymous Reply Report comment

    November 28, 2018 at 8:36 am

    Say 50% tariff ? And buy used – lot better investment !

  5. Anonymous Reply Report comment

    November 28, 2018 at 8:33 am

    Trump won the states where the plants are closing = Think GM is not a liberal democrap outfit ? They will do anything to get cheap labor. They still owe US taxpayers money – BILLIONS. !

    • Anonymous Reply Report comment

      November 28, 2018 at 9:54 pm

      Dumbass Trumpanzee

      • Anonymous Reply Report comment

        November 30, 2018 at 8:17 am

        When libs are stumped, they begin name calling and try to demean you. A lot of the time their remarks are as filthy as a gas station toilet.

  6. Anonymous Reply Report comment

    November 27, 2018 at 5:49 pm

    As well he should. We subsidize those jerks to provide jobs. If they are not gong to do it take a way the subsidy.

    • Anonymous Reply Report comment

      November 27, 2018 at 11:12 pm

      So says Trump, the 4 time bankrupancy guy that screwed thousands out of millions of dollars.
      You Trump supporters are fools & idiots.

      • Anonymous Reply Report comment

        November 28, 2018 at 5:30 am

        When 14,000 workers get laid off, it’s a bad thing. You know that, right? Trump is reminding GM that they did have other options.

        • Anonymous Reply Report comment

          November 28, 2018 at 8:20 am

          The Lib is just not smart to understand what you are saying.

          • Anonymous

            November 28, 2018 at 9:47 pm

            Get your head out of Trump’s ass.
            Trump is an anti-American , yellow draft dodging coward who then screwed thousands of people out of millions of dollars with his 4 bankruptcies.

          • Anonymous

            November 29, 2018 at 3:29 pm

            Damn, you really are that stupid. What Trump did in his past has nothing to do with GM screwing over the taxpayers and the worker. You are a freakin IDIOT!

          • Trump is a tool

            November 29, 2018 at 5:41 pm

            The Trumpster is going down – fast.

          • Anonymous

            November 29, 2018 at 7:10 pm

            Trump goes down pretty fast on Putin!

          • Anonymous

            November 29, 2018 at 11:13 pm

            Trump is just Putin’s little bitch.

          • Anonymous

            November 30, 2018 at 8:14 am

            You’re thinking of that worthless P.O.S. Obama. MAGA!

  7. Anonymous Reply Report comment

    November 27, 2018 at 5:05 pm

    M.A.G.A. My Attorney Got Arrested

    • Anonymous Reply Report comment

      November 30, 2018 at 6:02 pm

      That’s because he is a lying liberal!