General Motors made a major announcement on Monday saying it will close two plants in metro Detroit as well as plants in Ohio and Canada. The plan will help save the company $6 billion by 2020, according to GM.
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In a press release, the company said it will close the Detroit-Hamtramck Assembly Plant in Detroit and Warren Transmission Operations in Warren. Other plans closing include the Oshawa Assembly Plant in Oshawa, Ontario, the Lordstown Assembly in Warren, Ohio and the Baltimore Operations in White Marsh, Maryland.
According to a spokesperson for GM, the plants will be unallocated which means they will no longer produce vehicles in those plants in 2019. According to the company, the future of the plants will be part of contract talks with the UAW next year.
“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” said GM Chairman and CEO Mary Barra. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
According to the release, GM will lay off 14,700 factory and white-collar workers. Of those, 8,100 will be white-collar workers that will either take buyouts or be laid off.
The company said that the moves will help continue its focus on crossovers, SUVs and trucks. With the move, GM plans to cut 25 percent of the executive staff and 15 percent of the salaried and salaried contract staff.
"These actions will increase the long-term profit and cash generation potential of the company and improve resilience through the cycle," Barra added in the release.
Detroit Mayor Mike Duggan called the news "troubling," saying he spoke with Barra on Monday morning and has also spoken with UAW President Gary Jones as well as Detroit's economic development team.
"We all know there is strong demand for manufacturing space in Detroit and we are willing to work with GM to fill all the available manufacturing space at Poletown with either GM-related entities or other companies," Duggan added.
According to Duggan, there are about 1,500 people that work at the Detroit-Hamtramck Assembly Plant, and he is working with the UAW right now to develop a strategy on what to do next.
Rep. Debbie Dingell, who represents Michigan's 12th Congressional District, is calling on Congress to "work on bipartisan policies that keep manufacturing jobs in this country," adding that she cares deeply for the families affected by the news.
According to General Motors, the restructuring will help the company focus more on the electric and autonomous vehicle programs over the next two years. Those focuses include expanding the use of virtual tools, integrating vehicle and propulsion engineering teams, increase component sharing and compress global product development campuses.
“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,” said Terry Dittes, UAW Vice President, Director GM Department. “GM’s production decisions, in light of employee concessions during the economic downturn and a taxpayer bailout from bankruptcy, puts profits before the working families of this country whose personal sacrifices stood with GM during those dark days. These decisions are a slap in the face to the memory and recall of that historical American made bailout.”
With the news, GM also announced it was ceasing production of six vehicles in 2019. GM said it will stop producing the Chevrolet Volt, Chevrolet Cruze, Chevrolet Impala, Buick LaCrosse, Cadillac XTS sedan and Cadillac CT6 sedan.
According to the company, the Detroit-Hamtramck Assembly Plant produces the Volt, Impala, LaCrosse and CT6. The first vehicle came off the line in 1985 and more than four million cars have been built at the plant since.
The Warren Transmission plant produces 6-speed transmissions for several cars including the GMC Acadia, the Impala and the Electric Drive Unit for the Volt, Chevy Malibu Hybrid and Buick Velite.
In all, the two plants combined for more than $197 million in state wages and $26 million in income tax.
UAW Vice President, Terry Dittes, responded in a video message to the closures. The transcribed message is below:
"Hello brothers and sisters,
I’m holding in my hand the 2015 master contract between GM and the UAW. Our membership in the UAW and General Motors ratified this agreement and the one in 2011. And it wasn’t without sacrifice because our membership gave away many things, both during the bankruptcy proceedings, 2011 and 2015.
But today our reward today is General Motors announcing the closing of the Lordstown, Ohio plant and the Detroit Hamtramck plant. No more product will be built there. And that, in fact, will affect other GM locations in Michigan and in Maryland. And this decision today has the potential to affect 35,000 workers. UAW members and suppliers. And economically devastate the areas where these locations are operating today.
We’ve all seen what’s happened over the years when a big manufacturing plant leaves an area. It affects the families, the workers. It affects the local businesses, the grocery stores. It takes away the tax revenue.
General Motors continues to be profitable. Very profitable. We expect them to make over $10 billion net profit this year alone.
But they forget the taxpayers, our membership, the communities, the politicians all came to them in their darkest day. There was no jobs with a bankrupt General Motors. But this is how we in America are repaid by the closing of two big facilities. But we did not bail General Motors out so we could watch them hoard profits, shutdown plants and devastate communities and take advantage of low wage workers in Mexico or wherever they see.
This should be a tipping point for all of us. It’s time to tell General Motors they need to build product where they sell product. Because there is no job that’s safe in this country anymore when a profitable company like General Motors, can quickly just shut down and make a decision in boardroom that it’s going to end with no backlash from the American public.
We need to tell them, we need to tell them clearly that we want our products made here because this is where you sell them.
And we call on GM today just as they called on all of us over a decade ago:
Please save our American jobs."
