GM targets five NorthAm plants for idling, layoffs

US automaker General Motors plans to idle five North American plants while laying off up to 15,000 employees next year as part of its strategy of cutting costs and focusing on more efficient autos, including electric vehicles, amid slowing sales.

"We recognize the need to stay in front of changing market conditions and customers' preferences to position our company for long-term success," chief executive Mary Barra said today.

The latest measures reinforce GM's recent refocusing of its capital and resources to support the growth of its crossovers, SUVs and trucks as its sales have slowed. GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures.

The move also comes as auto companies begin to feel the impact of the Trump administration's 25pc tariffs on steel imports and 10pc tariffs on aluminum imports imposed earlier this year. Auto producer Ford has said the tariffs would boost its raw material costs by $1bn.

GM's latest measures will result in cash savings of approximately $6bn, along with cost reductions of $4.5bn and a lower capital expenditures run-rate of nearly $1.5bn.

"With changing customer preferences in the US and in response to market –related declines in cars, future produces will be allocated to fewer plants next year," the company said.

Production at some of the five plants could be resume depending on contract talks with the United Autoworkers union, GM said.

Detroit-based GM plans to idle its Detroit-Hamtramck assembly plant, halting output there of its Buick LaCrosse and Chevrolet Volt by March 1 next year, with output of its Cadillac CT6 and Chevrolet Impala halted by 1 June.

GM will idle its Lordstown, Ohio, assembly plant, ending production there of its Chevrolet Cruze autos by 1 March.

The Oshawa assembly plant in Ontario will also be idled, halting output of its Chevrolet Impala, Cadillac XTS and previous generation Silverado/Sierra K2 trucks by the fourth quarter of next year.

The Warren, Michigan, transmission plant, which makes six-speed transmissions for Impalas, Malibus, XTS, Volts and Acadias and the global front wheel electric for Volts, will be idled by 1 August next year. The Baltimore transmission plant, which makes full-size pickup transmissions, will be halted by 1 April.

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

GM's global retail vehicle sales fell by 14.5pc to 1.98mn units in the third quarter from 2.3mn units a year earlier. For the first nine months of the year, retail sales fell by 12pc to 6.1mn units from 7mn units.

GM's total US market share fell to 15.8pc in the third quarter from 17.3pc a year earlier. Total global market share fell to 8.6pc from 10pc.

Total North American retail sales fell to 834,000 units in the third quarter form 925,000 units a year earlier. Year to date they fell to 2.56mn units from 2.6mn units.