GM Announces Plans To Cut 15,000 Jobs In U.S. And Canada

As car sales continue to slump, General Motors says it will end production at five factories in the U.S. and Canada. The company says it will lay off 15 percent of salaried workers.

MARY LOUISE KELLY, HOST:

Today, General Motors announced a plan it says will accelerate its transformation for the future. What that acceleration looks like - closing plants and cutting nearly 15,000 jobs in North America. In a moment, we'll hear from the mayor of a town that is home to one of those GM plants. But first, Michigan Radio's Tracy Samilton reports on what's behind the restructuring.

TRACY SAMILTON, BYLINE: We meet Randy Sandusky at the UAW Local 22 union hall close by the Detroit-Hamtramck Assembly Plant, so named because its footprint spills outside Detroit's boundaries into the enclave of Hamtramck.

RANDY SANDUSKY: It's not good news. Holidays are here. This is the way it always happens. The holidays, and here they come, you know? We're going to do this, and we're going to do that - terrible. It's a shame.

SAMILTON: GM is unallocating this plant, along with another one in Michigan and plants in Ohio, Ontario and Maryland. That means GM is taking away production of the plant's current vehicles. And if it doesn't give them new ones, they will close.

Karen Majewski is mayor of Hamtramck. She says a lot of residents are going to be bitter about it. GM used eminent domain to tear down the city's historic Poletown neighborhood in 1980. Now it may leave a shuttered plant in its place.

KAREN MAJEWSKI: With the closing of this plant, that really is the end of automotive production in the city of Hamtramck. And that means something to us, I think, you know, psychically because we're a city, you know, built on the auto industry.

SAMILTON: About 1,300 workers build GM cars here. Note that I said cars, not SUVs. That's why this plant and others are likely to close. Increasingly, Americans are buying crossovers, SUVs and pickups - not cars. Ford wants to stop making all of its cars by 2020. Now it's GM's turn.

To investors, though, this is actually good news. GM's stock soared after the announcement. Investors know the Trump administration's steel tariffs are already reducing GM profits by more than a billion dollars. They know GM is big in China, where car sales are dropping sharply.

Stockholders want to know the company is preparing for the downturn. Nearly five years in as CEO, Mary Barra says that's exactly what GM is doing.

MARY BARRA: We definitely are in a very dynamic industry. And I hope you see that the team at General Motors - we're very focused on executing with speed to transform the company so we're well-prepared not only for tomorrow but into the future, and very focused on increasing and creating shareholder value.

SAMILTON: Barra reportedly spoke with President Trump before the announcement to tell him which plants would be closing. Using threatening language, Trump today said he wasn't happy with the news; the new moves are part of Barra's relentless effort to shut down GM operations around the world that are losing money, now shutting down plants that produce cars like the Cruze that aren't selling.

Michelle Krebs is an analyst with Autotrader. She says it's clear GM is no longer interested in world domination. It's interested in survival, growth and profits.

MICHELLE KREBS: The automakers have learned a lot from the Great Recession. And they - that memory is still like it was yesterday. And so they are not going to get into a situation where they find themselves nearly bankrupt as they did approaching the Great Recession.

SAMILTON: GM says it will release more details about the restructuring at the start of next year, just months before it begins negotiations with the United Auto Workers on its next four-year contract. The cuts announced today will likely make that negotiation even thornier. For NPR News, I'm Tracy Samilton.

Copyright © 2018 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.