General Motors is poised to end production at five plants in the U.S. and Canada, kill off several passenger cars – including the Chevrolet Impala – and slash 15 percent of its salaried workforce in a sweeping cost-cutting plan designed to boost profits and adjust to America’s changing tastes in vehicles.
Nathan Bomey of USA Today had the news:
The Detroit-based automaker said it would end production by the end of 2019 at its Lordstown Assembly plant in northeast Ohio, its Detroit-Hamtramck Assembly plant in southeast Michigan, its Oshawa Assembly plant in Ontario, its Baltimore Operations parts plant in Maryland and its Warren Transmission Operations plant in southeast Michigan.
The moves reflect the stark consumer shift to SUVs, crossovers and pickups. All of the GM plants on the chopping block make passenger cars.
The company will also discontinue the Chevrolet Cruze and Volt in North America as well as the Buick LaCrosse, Cadillac XTS and Cadillac CT6.
While sales of those models were suffering, they continued to support thousands of jobs. GM has about 1,500 employees at the Detroit plant, 1,600 at the Lordstown factory and 2,500 in Oshawa.
David Shepardson and Nick Carey of Reuters noted that the Hamtramck plant closing resulted in earlier relocations:
GM’s widely touted factory of the future, forced on a town desperate for jobs and hailed decades later by former President Barack Obama, is set to wind down over the next few years, leaving beleaguered Hamtramck wondering what happened.
Detroit Mayor Mike Duggan said at a news conference Monday that he told GM chief executive Mary Barra Monday that “we moved thousands of people out of that neighborhood … to create that assembly plant and I felt that the city of Detroit deserved more consideration.”
The Detroit-Hamtramck plant stands on 465 acres of land that was once a neighborhood known as “Poletown.”
In 1981, the Michigan Supreme Court approved a decision to allow Detroit to tear down up to 1,500 homes, more than 140 businesses, a hospital and six churches to build the $500 million plant. The Detroit News reported 4,200 people lost their homes as a result.
Susan Tompor of the Detroit Free Press reported that the company stock rose 5 percent on the news:
Shortly before noon, GM stock was trading at $38.11 a share, up $2.18, or 6.07 percent for the day. At one point in the afternoon, GM jumped as much as 7.9 percent to $38.75, the highest since July.
The stock price pulled back some, though, and GM closed at $37.65 a share, up $1.72 a share, or 4.79 percent.
GM remains down about 12 percent from an adjusted close of $42.93 a share on Jan. 8.
In contrast, the Dow Jones Industrial Average was up 1.46 percent Monday. The Dow closed at 24,640.24 points, up 354.29 points.
Ford closed Monday at $9.41 a share, up 28 cents, or 3.07 percent.
