Skip to main content

The context you need, when you need it

When news breaks, you need to understand what actually matters — and what to do about it. At Vox, our mission to help you make sense of the world has never been more vital. But we can’t do it on our own.

We rely on readers like you to fund our journalism. Will you support our work and become a Vox Member today?

Join now

General Motors is cutting 14,000 jobs and focusing on self-driving and electric vehicles

“Resources allocated to electric and autonomous vehicle programs will double in the next two years.”

The Detroit-Hamtramck Assembly in Michigan, one of the plants GM will close.
The Detroit-Hamtramck Assembly in Michigan, one of the plants GM will close.
The Detroit-Hamtramck Assembly in Michigan, one of the plants GM will close.
AFP/Getty Images

General Motors announced on Monday that it will lay off 15 percent of salaried workers and close five plants in the United States and Canada. The cuts will eliminate approximately 8,000 salaried workers, including 25 percent of executives, and an additional 6,000 hourly workers will either lose their jobs or be transferred, according to CNN.

The five plants that will close are the Oshawa Assembly in Ontario, Lordstown Assembly in Ohio, Detroit-Hamtramck Assembly in Michigan, Baltimore Operations in White Marsh, Maryland, and Warren Transmission Operations in Warren, Michigan. GM will also close two plants outside of North America, but those locations have not yet been announced. According to Huffington Post reporter Dave Jamieson, GM has set aside $2 billion to pay for layoffs and buyouts.

The restructuring, which will reportedly save the company $6 billion by 2020, will take the company’s focus off sedans, which have increasingly fallen out of favor in comparison to SUVs and hatchbacks. The plants closing either assembled or made parts for sedans; a couple of the facilities made trucks as well, but those trucks are also made in Mexico, according to CNN. Cars being discontinued include the Chevrolet Cruze, Volt, and Impala, along with the Buick LaCrosse, Cadillac XTS, and Cadillac CT6.

GM’s shuttering of plants is also a step toward its new focus on producing electric and autonomous vehicles; its new motto is “Zero Crashes, Zero Emissions, Zero Congestion.” In 2017, the company bought Cruise Automation, a San Francisco-based driverless car company. According to a press release, “resources allocated to electric and autonomous vehicle programs will double in the next two years.”

The exportation of work on small cars, like sedans, was a concern for some economists when the new US-Mexico-Canada trade bill was signed earlier this year. According to the Washington Post, there were also concerns “that automakers might not make as many cars in North America to export to China and elsewhere overseas because costs would be higher in the USMCA region than making the vehicles in Asia.”

The types of changes GM is making are not unique in the auto industry. In April, Ford announced it would end all production of sedans in North America. Newer companies such as Alphabet, Apple, Tesla, and Uber are also in the race, trying to build the cars of the future.

Sen. Sherrod Brown (D-OH) expressed his disappointment in GM’s decision, tweeting that “Ohio taxpayers rescued GM, and it’s shameful that the company is now abandoning the Mahoning Valley and laying off workers right before the holidays.”

Sen. Rob Portman (R-OH) tweeted similar sentiments, saying, “I’m disappointed w/ how the hardworking employees have been treated throughout this process.”

Canadian Prime Minister Justin Trudeau tweeted that “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.”

Unions from Canada and the US are also displeased. The Canadian union Unifor said it would not accept GM’s decision and that GM needs to live up to the “spirit of the agreement” made during 2016 contract negotiations. The plant in Oshawa has been open for 65 years and employs about 2,500 people.

The United Autoworkers Union chimed in, saying that GM’s decision “will not go unchallenged.” In a statement, Terry Dittes, UAW vice president and director of the UAW-GM Department, said, “This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce.”

The president of UAW, Gary Jones, also commented that “The practice of circumventing American labor in favor of moving production to nations that tolerate wages less than half of what our American brothers and sisters make, must stop.” The five plants mentioned in GM’s announcement are supposed to be unallocated in 2019.

More in Money

Podcasts
A cautionary tale about tax cutsA cautionary tale about tax cuts
Podcast
Podcasts

California cut property taxes in the 1970s. It didn’t go so well.

By Miles Bryan and Noel King
Future Perfect
The tax code rewards generosity. But probably not yours.The tax code rewards generosity. But probably not yours.
Future Perfect

Why giving to charity is a better deal if you’re rich.

By Sara Herschander
Politics
The Supreme Court could legalize moonshine, and ruin everything elseThe Supreme Court could legalize moonshine, and ruin everything else
Politics

McNutt v. DOJ could allow the justices to seize tremendous power over the US economy.

By Ian Millhiser
Politics
OpenAI’s oddly socialist, wildly hypocritical new economic agendaOpenAI’s oddly socialist, wildly hypocritical new economic agenda
Politics

The AI company released a set of highly progressive policy ideas. There’s just one small problem.

By Eric Levitz
Future Perfect
Am I too poor to have a baby?Am I too poor to have a baby?
Future Perfect

How society convinced us that childbearing is morally wrong without a fat budget.

By Sigal Samuel
The Logoff
Why inflation is upWhy inflation is up
The Logoff

What the Iran war is doing to the economy, briefly explained.

By Cameron Peters