General Motors is to lay off 14,000 workers in North America and put five factories up for potential closure as it stops making some of its unpopular cars.
The announcement is the biggest restructuring in North America for the US's largest automaker since its bankruptcy a decade ago. The stock is still down about 7 per cent this year.
Ontario Premier Doug Ford says he will not be casting blame on the federal Liberal government over the decision by General Motors to close an assembly plant in Oshawa and lay off almost 3,000 workers.
Ontario Premier Doug Ford was less optimistic, saying GM told him there is not much the government can do. The Oshawa assembly plant is poised to close in 2019, while the other four plants are in the U.S. "These are things we're doing to strengthen the core business", GM chief executive and chairwoman Mary Barra told reporters Monday.
"If GM Canada is indeed turning its back on 100 years of industry and community - abandoning workers and families in Oshawa - then this is a callous decision that must be fought", she said in a statement. The first thing I said is, 'What can we do?
The closures will be accompanied by a broader restructuring, reducing GM's overall salaried and contract workforce by 15 percent. The company said it will cut executive ranks by 25 percent to "streamline decision making".
At the factories, 3,000 workers could lose jobs in Canada and another 3,600 in the U.S.More news: Houston Rockets to part ways with Carmelo Anthony
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GM says it is maintaining its profitable lineup of SUVs and trucks but will shift away from some of its smaller vehicles that haven't seen strong sales. Some 75 percent of its global sales will come from just five vehicle architectures by the early 2020s. In Ontario, it plans to halt production of the Chevrolet Impala and Cadillac XTS by the final quarter of 2019.
Cost pressures on GM and other automakers and suppliers have increased as demand waned for traditional sedans.
Senator Rob Portman is urging GM to bring a new the production of another vehicle to the Lordstown plant.
Industry analysts are already plotting out possible targets for GM, including its sprawling Lordstown plant in northeastern Ohio. "We think it's appropriate to do it at a time, and get in front of it, while the company is strong and while the economy is strong".
GM's announcement came as a shock to the Trump administration, which has heavily sold itself as protecting American jobs and rebuilding the country's manufacturing base. Last month, GM rival Ford Motor. Of that amount, US$600 million was due largely to USA tariffs on imported steel and US$200 million from retaliatory tariffs imposed by China on American vehicles, Ford said.
The industry-wide slowdown in passenger vehicle sales started to pick up steam in 2017.
The auto history runs deep in Oshawa. Fiat Chrysler Automobiles got out of small and midsize cars two years ago, while Ford announced plans to shed all cars but the Mustang sports auto in the U.S.in the coming years.
Lordstown, which has dropped from three shifts to one in recent years, exclusively produces the Chevrolet Cruze.