Restructuring of General Motors, the largest automaker in the U.S., has started to transform itself from an internal combustion engine to a new technology centered on electric vehicles and self-driving cars. Mary Barra (57), CEO and chairman of the company, took over the baton. The restructuring is the largest since the global financial crisis in 2008 put GM at risk of bankruptcy.
GM announced its restructuring plan to shut down factories and cut manpower in the U.S. and Canada on Wednesday (local time). Bloomberg News and others said they plan to stop operating five North American production plants and two foreign plants by the end of 2019 and cut some 14,000 employees.
Four U.S. and one Canadian plant have been confirmed to be closed or converted. It is an assembly plant with Hamtlamk, Ohio, Rosetown, Michigan, Warren, Baltimore, Maryland, and Osha, Ontario, Canada.
Production of Chevrolet Cruise, Cadillac CT6, and Buick Lacros that are assembled here will be stopped. Chevrolet Cruz transfers its supplies to a Mexican factory and continues to produce the remaining models for export purposes, but the rest of the models will be discontinued. GM has not announced the location of the two overseas plants to be closed this time.
Some 14,000 employees are working in the U.S. and Canada. This represents 8% of the 180,000 global workforce employed by GM. According to his duties, there are about 8,000 office workers and 6,900 production workers. It is also planning to cut 25 percent of its staff.
"This is a measure to put GM in an advantageous position in the highly rapidly changing automotive industry," Chairman Bara told reporters on the day. The purpose of the intensive restructuring is to increase investment costs through cost reduction. GM plans to save 6 billion U.S. dollars by the end of next year through this restructuring.
It is going to strengthen investments in self-driving and electric vehicles instead of reducing its conventional vehicles. Cruise, GM`s self-driving affiliate, plans to commercialize mobility services using unmanned self-driving taxis in major U.S. cities next year. It is also investing heavily in the development of about 20 types of electric vehicles that will start selling in 2023.
The decision to reduce the core 부산경마 business that constitutes GM and transfer to new technologies such as unmanned taxi service is considered radical. Barra's decision to make and take preemptive action is due to the painful memory of his near bankruptcy during the global financial crisis of 10 years ago. "Because of its experience at the time, GM is facing reality and moving faster than other companies," Bloomberg said. At that time, GM was reborn with $49.5 billion from the U.S. government.
We cannot continue to produce our existing less profitable cars while investing heavily in mobility services that do not guarantee profits in the near future, said Marien Keller, auto analyst. In a situation where he had to choose, Bara chose the future.
Bara captured the timing of restructuring with keen insight. This indicates that the U.S. will minimize side effects by implementing restructuring when the U.S. economy is booming. GM stressed that the move was not a result of the economic downturn but a preemptive reduction in costs in the face of the strong U.S. economy.
Political circles protested. U.S. President Donald Trump said GM should stop production in China and assign new cars to Ohio. The Ohio plant is the one that was decided on. It is said that he delivered the message to the chairman in person.