The Slatest

GM to Lay Off More Than 10,000 Workers, Close Five North American Plants

A line of several Chevy Cruzes of various colors viewed from the side
Chevrolet Cruze cars for sale at Jack Phelan Chevrolet in 2016 in Lyons, Illinois.
Scott Olson/Getty Images

GM is “transforming” away from the car business.

That’s how the flagship American automobile company described the massive cuts it announced Monday, part of an “accelerating transformation” that includes shuttering plants in Detroit, Ohio, Maryland, Michigan, and Ontario—as well as two overseas plants by the end of 2019. The company will be slashing its staff by about 15 percent and its executive ranks by a quarter, totaling more than 10,000 job losses, according to calculations by Bloomberg, including 6,000 workers at its plants.

The layoffs and plant closures are part of a transformation sweeping the U.S. auto industry as it largely abandons conventional passenger cars and instead focuses almost entirely on trucks, SUVs, and crossovers, along with development of fully electric and self-driving vehicles. Ford announced earlier this year that it would sell only two vehicles in North America that aren’t a type of truck: the Mustang and the Focus Active, a crossover.

GM put the blame for the plant closures on “market-related volume declines in cars” while noting that it had “refocused capital and resources to support the growth of its crossovers, SUVs and trucks.” For example, one plant being shut down in Lordstown, Ohio, is where the Chevy Cruze is assembled.

The Cruze is just one example of a suffering GM sedan—Cruze deliveries in the most recent quarter were down more than 25 percent compared with the same quarter last year, while deliveries of the Chevy Malibu had fallen by more than 45 percent. By comparison, the hulking Suburban and Tahoe saw their deliveries go up more than 10 percent and 20 percent respectively. Overall, in the first nine months of the year, GM’s total deliveries had slightly declined.

Along with the Cruze’s U.S. manufacturing, GM will also scrap North American production of the Buick LaCrosse, Cadillac CT6, and the Chevy Impala, as well as its hybrid Volt.

While the SUV and truck market should be buoyed by the Trump administration’s assault on mileage and environmental standards imposed by the state of California and the Obama administration, GM has said that tariffs on steel and aluminum have hurt its business. In July, the company said that it had “unmitigated exposure” to rising steel and aluminum prices, which have been boosted by the tariffs.

GM’s stock was up almost 6 percent in early afternoon trading.