GM to close several factories to enhance business performance

Worldwide
Published:  29 November, 2018

The U.S. headquartered automotive manufacturer has announced it will cease operations in five North American plants and another three abroad.

General Motors (GM) has announced its intention to halt production in the assembly plants of Oshawa, Ontario, Canada; Detroit-Hamtramck in Detroit; Lordstown in Warren, Ohio; as well as the propulsion plants of Baltimore Operations in White Marsh, Maryland, and Warren Transmission Operations in Warren, Michigan. These are to be closed in 2019 and the number of redundancies in North America alone should total 14,000 workers.

In addition, GM is also to close the assembly plant in Gunsan, South Korea, and another two additional plants outside North America by the end of 2019. “These manufacturing actions are expected to significantly increase capacity utilisation. To further enhance business performance, GM will continue working to improve other manufacturing costs, productivity and the competitiveness of wages and benefits”, said GM in a statement.

Switch to electric

The automotive manufacturer, which has recently invested in newer, “highly efficient” vehicle architectures, said it aims to optimise its product portfolio by also prioritising future vehicle investments in its next-generation battery-electric architectures; more than 75% of GM’s global sales volume are expected to come from five vehicle architectures by early next decade.

GM also aims to increase capacity utilisation by continuing to refocus capital and resources to support the growth of its crossovers, SUVs and trucks, adding shifts and investing US$6.6 billion in U.S. plants that have created or maintained 17,600 jobs. “With changing customer preferences in the U.S. and in response to market-related volume declines in cars, future products will be allocated to fewer plants next year”, said GM. Mary Barra, Chairwoman and CEO, GM, noted among other elements forcing this decision the rising costs, including from new tariffs on materials such as steel.

“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” said Barra. “We recognise the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”