General Motors announced today that it will “significantly cut car production in North America and stop building some low-selling car models.” Additionally, their production efforts will be reduced overall in terms of salaried and executive workers.
Three plants will see production cease in both Canada and the United States. These plants, located in Ohio, Detroit and Oshawa, will no longer receive new products to assemble, throwing its sustainability into question. These plants in particular build vehicles that are “slow-selling” and have fallen out of demand.
Cost pressures have hit the auto industry in North America, especially for low selling traditional sedan style cars. GM also cited steel tariffs imposed this year by the Trump administration which have already costed the company US$1 billion.
Unifor, the Canadian union that represents most auto workers in the country, said that it was informed by General Motors of their plans to cease allocation of new products to the Oshawa plant as soon as December 2019.
In Oshawa, GM employs around 2,500 unionized staff. This Ontario plant produces the Chevrolet Impala and Cadillac XTS sedan models. It finalizes assembly on more popular Silverado and Sierra pickup trucks which get shipped in from Indiana.
For months, GM has tried to figure out how to address the shrinking car demand. The company has begun the expensive transition towards electrified and automated vehicle production. In October, GM offered “buyouts to 50,000 salaried employees in North America”, effectively signalling their downsizing efforts.
The plants that produce the lagging sedans have curtailed work hours. Both the Detroit Hamtramck and Lordstown, Ohio assembly plants are down to just one working shift per day.
Competing auto makers Fiat Chrysler and Ford Motors have also cut their car production in the United States. Ford has gone so far to say that they will “stop building nearly all cars in North America”.
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