Here’s All You Need To Know About GM’s Major Restructuring
Good for General Motors, bad for general peopleby Sidd Dhimaan, on
General Motors is in the midst of major restructuring, which it confirmed by announcing that five of its North American plants will be shut down, including the plant in Ohio that manufactured the Cruze and the Detroit-Hamtramck plant that was once part of an epic neighborhood battle. This also marks the end of the Chevrolet Volt Hybrid. However, the biggest announcement was that around 14,000 employees have been given pink slips.
What Does The Future Hold?
This is the biggest restructuring that the automaker has done since it filed for bankruptcy a decade ago. General Motors is undergoing this restructuring to make it profitable by 2021. In pure numbers, GM will be making changes to the tune of $3 billion in order to generate positive cash flow of $6 billion in the next two to three years. In the last four years, GM has shifted its focus towards SUVs and trucks by adding investments of $6.6 billion in plants that have around 17,600 employees working currently.
GM issued a statement saying it is all part of an effort to continue “Transforming the global enterprise to advance the company’s vision of Zero Crashes, Zero Emissions, Zero Congestion.”
The five plants that have been “unallocated” include three assembly plants Oshawa Assembly in Oshawa, Ontario, Canada; Detroit-Hamtramck Assembly in Detroit, Michigan; and Lordstown Assembly in Warren, Ohio.
The other two are propulsion plants – Baltimore Operation in White Marsh, Maryland; and Warren Transmission Operations in Warren, Michigan.
Around 15-percent of the salaried workforce is being let-off to transform the company into a global workforce to ensure it has the right skill sets for the present and the future. This lay-off means 25-percent fewer executives will streamline decision making.
The Chevy Volt Was Going to Die Sooner Or Later
As far as the Chevrolet Volt Hybrid is concerned, its end was inevitable. Although the Volt Hybrid was one of the first hybrid cars to grace the markets, it does not serve its purpose anymore.
At a time when electric cars have a decent range to drive around all day, the Volt was an urban commuter at best. It carried around an engine and two electric motors, therefore reducing the efficiency of both of them.
GM will bludgeon its way through all the slow-selling products in the near future, and the process has started by killing the Volt Hybrid. The company also indicated that Chevrolet Cruze, CT6, Impala, Cadillac XTS and Buick LaCrosse are next in line; so, expect a lot of obituaries to follow soon.
What They Had To Say
Of course, the lay-off news didn’t go down well. Debbie Dingell, representing Detroit, said, “This is a warning, and we all must be concerned about protecting jobs and keeping them in this country. I care deeply about working families hearing this news right now. If we want our auto industry to continue to be the global leader in transforming mobility, federal policy must ensure we keep them at the forefront of innovation and technology. Congress must work together on bipartisan policies that keep manufacturing jobs in this country, develops clean energy, and supports infrastructure to transform our mobility future.”
Canadian Prime Minister Justin Trudeau was also disappointed by the situation and tweeted this, “GM workers have been part of the heart and soul of Oshawa for generations - and we’ll do everything we can to help the families affected by this news get back on their feet. Yesterday, I spoke with GM’s Mary Barra to express my deep disappointment in the closure.”
The lay-off was done after the employees refused a buyout. We will have to wait and watch as to how the company plans to sort this out after leaving 14,000 people without jobs. From GM’s point-of-view, the restructuring is already ringing bells as the automaker’s stock prices were up by 7-percent on the news. What are your thoughts on this whole episode? Share them with us in the comments section below.
Read our full review on the 2018 Chevrolet Volt.