Responding to stagnant market for traditional combustion motors, General Motors on Monday confirmed that the company would be slimming its workforce in North America and will cut production of slow-selling models.
Apart from this, the company also aims to allocate more investments towards electric and autonomous vehicles. The restructuring in question is by far the biggest one that GM has undertaken after it filed for bankruptcy a decade ago.
The company said that it will take pre-tax charges of $2 billion to $3.8 billion to pay for the cutbacks. However, actions to improve annual free cash flow by $6 billion by the end of 2020 will also be put into motion.
By next year, the company plans to press pause on three of its assembly plants at Lordstown, Ohio, Hamtramck, Michigan and Oshawa, Ontario. Additionally, manufacturing of several models that are currently assembled at those plants including the Chevrolet Cruze, the Cadillac CT6 and the Buick LaCrosse will be stopped.
Reports suggest that close to 14,700 jobs are expected to be affected, out of which some 8,100 are white-collar jobs that will be reduced through buyouts and layoffs. Close to 6,000 factory workers are expected to lose their jobs or be transferred to other plants.
The company also said it will cut executive ranks by 25 percent to “streamline decision making.”