GM announces first layoffs in six years, cuts 2,000 jobs
NEW YORK (CNNMoney) — General Motors is cutting 2,000 factory jobs in Michigan and Ohio — its first round of layoffs since 2010.
The company said it will cut the third shift of production at the Lordstown, Ohio plant, which makes the compact Chevrolet Cruze. It’s also cutting jobs at the Lansing, Mich., Grand River plant where it makes the Chevy Camaro and the Cadillac ATS and CTS.
GM said the job losses will hit 1,200 factory workers in Ohio and 800 in Michigan, though some of those workers may be offered other positions. The jobs will be eliminated in January. GM had 97,000 U.S. workers as of the end of last year.
Each plant will continue to operate two shifts a day to make the same cars they do now — but fewer of them.
The company currently has 97,000 U.S. employees, having added about 20,000 jobs since its 2009 bankruptcy reorganization.
The Lordstown plant makes the Cruze sedan. GM also makes a hatchback version of the Cruze at a plant just over the border in Mexico. GM started selling that Mexican-made version of the car in the U.S market with the 2017 model.
President-elect Donald Trump has repeatedly told automakers that, if elected, he intends to impose a 35% tax on cars they build in Mexico for the U.S. market.
GM spokesman Tom Wickham said that the timing of the company’s announcement had nothing to do with Tuesday’s election, but was instead aimed at giving affected workers the 60-day notice they are legally entitled to.
He added that the company did not announce the layoffs before the election because it did not want to be accused of trying to affect the election results.
“There is no connection between the two issues,” he said. “Lordstown production adjustment is being made based on the softening car market and outlook for 2017.”
Cruze sales are down nearly 20% so far this year in the U.S., primarily because GM decided to cut back on less profitable sales to rental car companies, Wickham said.
Most small car models have seen slumping sales in recent years thanks to low gasoline prices. Sales of the compact Cadillac ATS and the midsize CTS are both off 16% this year, while sales are down 8% the Camaro, which is made at the affected Michigan plant, are down 8%.
But while sales of these models are down for GM, pickup trucks and SUVs, which produce much bigger profits than small cars, continue to sell briskly.