GM to Restructure; Shutter Five North American Plants

BY DOMINIC COLETTI

General Motors announced a string of changes as part of an ongoing effort to keep the automaker relevant in a changing market. As part of the changes, the company announced a sweeping staffing overhaul, cutting 25% of executives and 15% of the total salaried workforce. In a press release outlining the changes, GM announced three assembly plants: Oshawa, Detroit-Hamtramck (pronounced Ham-tram-ick), and Lordstown as well as two propulsion plants: Baltimore and Warren will be unallocated. The three assemblies all manufacture cars (i.e. sedans and coupes) which are declining in popularity as crossovers, SUVs, and trucks take larger and larger shares of the market..

These closures affect approximately 15,000 employees, infuriating American and Canadian officials. Canadian Prime Minister Justin Trudeau expressed his “deep disappointment” with the decision in a phone call with GM CEO Mary Barra, and U.S. President Donald Trump, who staked much of his campaign on the renaissance of American manufacturing, threatened to cut all government subsidies benefiting the company. Ms. Barra described the moves as being taken to “continue [GM’s] transformation to be “highly agile, resilient, and profitable.”

GM officials did not immediately respond to a request for comment.

While GM has announced the closures as official, Unifor (a Canadian trade union) promised “one hell of a fight” over the Oshawa plant being shuttered, and the United Automobile Workers (America’s automotive trade union) vowed to fight any U.S. plant shutdowns. As well, many in Detroit are enraged as GM plans to close the Detroit-Hamtramck Assembly. Residents unconnected with the auto industry nonetheless recall the controversial use of eminent domain and the razing of a Hamtramck neighborhood. Many are concerned that the plant’s closing will make the relocation of hundreds of families for naught.

GM choosing to downsize seems strange considering the company is currently quite successful financially. Since being bailed out by Congress, the automaker has found broad success, making an initial public offering and returning to profit in 2010, the year after it received Federal monies for relief. However, the moves are intended to prevent the company from falling behind as consumers shift away from cars and towards larger vehicles. Said Barra, “These actions will…improve resilience through the cycle,” suggesting GM is becoming more adaptable, striving to avoid another corporate collapse.