DETROIT (CBS) — General Motors will lay off up to 14,000 factory and white-collar workers in North America and consider closing up to five major plants as the auto giant restructures to cut costs and focus more on electric vehicles and autonomous cars. The company-wide restructuring was announced Monday. GM said it would halt production at three assembly plants: Lordstown Assembly in Warren, Ohio; Detroit-Hamtramck Assembly in Michigan and Oshawa Assembly in Ontario, Canada. It also plans to close transmission plants next year in White Marsh, Maryland, and Warren, Michigan, the company said in a news release.
Most of the affected factories build cars that won’t be sold in the U.S. after next year, including the Chevrolet Volt rechargeable gas-electric hybrid. They could close or they could get different vehicles to build. Their futures will be part of contract talks with the United Auto Workers union next year.
“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 that projected $6.5 billion in cost cuts in 2018. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
The reduction includes about 8,000 white-collar workers, some of whom will take buyouts and others who will be laid off. That amounts to roughly 15 percent of GM’s 54,000 salaried employees in North America.
More than 6,000 factory workers could lose jobs in the U.S. and Canada, although some could transfer to truck and SUV plants.
GM doesn’t foresee an economic downturn and is making the cuts “to get in front of it while the company is strong and while the economy is strong,” CEO Mary Barra told reporters.
Barra said GM is still hiring people with expertise in software and electric and autonomous vehicles. Many of those who will lose jobs are now working on conventional cars with internal combustion engines. Barra said the industry is changing rapidly and moving toward electric propulsion, autonomous vehicles and ride-sharing, and GM must adjust with it.
The company, she said, has invested in newer architectures for trucks and SUVs so it can cut capital spending while still raising investment in autonomous and electric vehicles.
GM has offered buyouts to 18,000 retirement-eligible workers with a dozen or more years of service. It would not say how many have accepted the buyouts, but it was short of the company’s target because GM said there will be white-collar layoffs.
The company expects to take a pretax charge of $3 billion to $3.8 billion due to the actions, including up to $1.8 billion of asset write downs and pension charges. The charges will take place in the fourth quarter of 2018 and the first quarter of next year.
The factories up for closure are part of GM’s effort “to right-size our capacity for the realities of the marketplace,” as consumers shift away from cars to trucks and SUVs, Barra said.
Among the possibilities are the Detroit/Hamtramck assembly plant, which makes the Buick LaCrosse, the Chevrolet Impala and Volt, and the Cadillac CT6, all slow-selling cars. LaCrosse and Volt production will end March 1, while CT6 and Impala production would stop June 1.
The plant in Lordstown, Ohio, which makes the Chevrolet Cruze compact car also is on the list, and Barra said the Cruze would no longer be sold in the U.S. Production would stop March 1.
Work on six-speed transmissions made at the Warren, Michigan, transmission plant would stop Aug. 1, while the Baltimore transmission plant would stop production April 1, GM said.
Meanwhile, GM’s plant in Oshawa, Ontario, will stop making the Impala, Cadillac XTS and 2018 full-size pickups in the fourth quarter of next year.
Barra said tariffs on imported aluminum and steel have hit the company, but she stopped short of saying they had anything to do with the restructuring.
(© Copyright 2018 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)