Thursday , February 25 2021

General Motors publishes closure of plants

The company would dismiss around 10,000 employees as it prepares for possible slowdown in the US and a price extension.

General Motors came to an end yesterday to months of congestion and speculated about the possible restructuring of its business, confirming that it would close at least five plants in the United States and Canada in the face of uncertainties about the global economy and a re-direction towards to electric and independent vehicles.

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"We make these decisions while the economy is sound," said the company's Chief Executive, Mary Barra, to reporters. "This industry is changing very quickly and we want to be certain that we will be in a good position. We believe it is appropriate to do it at a time when the company is strong and n" #; the economy too ".

The executive added that it saw "very challenging contexts" in the future, with reference to potential slowdown in the US economy, its main market. The sale of the whole industry in the planet's first planet is going down since 2016 and could close this year under the threshold of 17 million new units. In China, the second most important country for GM business, activity has also dropped.

But the company also admitted the uncertainty in the commercial arena, in a year when cross tariffs between the two largest economies on the planet have worried investors. GM has ensured that the levies imposed by Washington on imports of steel and aluminum have already increased their costs of around $ 1 billion.

The company – the largest automaker in the United States – will close four locations in Detroit, Baltimore and Ohio next year, as well as one in the Canadian Canada city. In total, the bill will mean the redundancy of between 8,000 and 10,000 employees, including a quarter of its operating downs, which aims to make more efficient decisions.

At the end of 2019, the company also evaluates the closure of two other facilities in other parts of the world, in addition to the closure announced before its assembly plant in Gunsan, South Korea. In Latin America, the company has offices in Mexico and Brazil.

The investors received the announcement about the good restructuring, which had punished the company during the year. GM shares came to jump 7.9% yesterday to quote at US $ 38.75, the highest price since July.

Modify to times

The published changes are trying to reduce GM costs of $ 4,500 million, as well as reducing capital expenditure by some US $ 1,500 million a year.

The company will also give the best to build some of its models (Buick LaCrosse, Chevrolet Cruze and Cadillac CT6, among others) as it focuses on the development and production of autonomous electric and electric vehicles. This suggests that it could strengthen its equipment GM Cruises, the unit that is responsible for the development of cars without a driver. In the last year, that department, based in San Francisco, has grown by around 1,000 employees.

But the conversion efforts of the company were not celebrated by all. Trump said yesterday he spoke to Barra and said "we put a lot of pressure" so that the plants have not closed, some of which are in areas that are relevant to the president's victory in 2016.

Meanwhile, Canada's Prime Minister, Justin Trudeau, said on Twitter that he had conveyed his "deep disappointment" to the GM CEO for closing the plant in Oshawa, Ontario, with 65 years of history and some 2,200 of employees. This is the last factory of the company in that country. The last one, in Toronto, is at risk of being moved to Mexico. The authority added that "we will do everything we can to help affected families stand up."

In his case, Detroit's mayor, Mike Duggan, stated in a statement that the GM decision was "worried" and that the city "was ready to fill all available space for manufacturing with associated entities with GM or other companies ".

Promotion of the industry

Ten years after the financial crisis led by a number of major brands to declare bankruptcy, the US automotive industry faces a new scenario of uncertainty due to technological changes and consumers, given the increasing change towards electric and autonomous automobiles , and mobility has to share.

Other major US companies have also announced dramatic measures this year. Ford said in April that he would significantly reduce his sedan production and aim to reduce the annual costs of $ 25 billion by 2022.

"New vehicle sales are challenged by higher interest rates and higher costs," Cox Automotive's chief economist, Jonathan Smoke, told FT. "Historically, large purchases such as homes and cars tend to fall before a recession. The period in which low historic interest rates ultimately endorsed official sales sales," he said.

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