General Motors yesterday announced plans to close nine plants, cut shifts and axe 30,000 jobs across North America by 2008.
GM Chairman and CEO Rick Wagoner said a ‘wide-ranging restructuring of manufacturing operations in the United States and Canada’ is part if the plan to return the company to profitability.
A company statement said: ‘In total, the plan is to achieve $7 billion of cost reductions on a running rate basis by the end of 2006 – $1 billion above the previously indicated target.’
GM said: ‘A total of nine assembly, stamping and powertrain facilities and three Service and Parts Operations facilities will cease operations.’
The GM statement claimed its planned reduced capacity level in North America ‘will still provide GM plenty of flexibility to anticipate and meet market demand, but in a much more cost-effective manner.
‘A total of 30,000 manufacturing positions will be eliminated from 2005 through 2008.’
Wagoner said: ‘These actions are necessary for GM to get its costs in line with our major global competitors. In short, they are an essential part of our plan to return our North American operations to profitability as soon as possible.’
The GM boss said the US union leaders had accepted cuts in company health insurance contributions, saying ‘we have received ratification of the agreement with the UAW, which will help significantly to address our health-care cost challenges’.
GM said its assembly plants at Oklahoma City; Lansing, Michigan and Spring Hill, Tennessee; will all cease production by the end of 2006.
The Doraville, Georgia. plant will shut in 2008.
The third shift will be removed at Oshawa Car Plant No. 1, in Ontario, Canada, in the second half of 2006. Subsequently, Oshawa Car Plant No. 2 will cease production after the current product runs out in 2008.
The third shift will be removed at Moraine, Ohio, during 2006.
The Lansing, Michigan, Metal Center will cease production in 2006.
The Pittsburgh, Pennsylvania, Metal Center will cease production in 2007.
The Parts Distribution Center in Portland, Oregan, will cease operations in 2006; the Parts Distribution Center in St Louis, Missouri, will cease warehousing activities and will be converted to a collision centre facility in 2006; the Parts Processing Center in Ypsilanti, Michigan, will cease operations in 2007.
One additional parts processing center, to be announced at a later date, will also cease operations in 2007.
St Catharines Ontario Street West powertrain components facility in Ontario, Canada, will cease production in 2008.
The Flint, Mich., North 3800 engine facility (‘Factory 36’) will cease production in 2008.
Wagoner said: ‘GM will work with the leadership of its unions, as any early retirement programme would need to be mutually agreed upon. GM hopes to reach an agreement on such a plan as soon as possible.’
Yesterday All Trades Unions Alliance national secretary Dave Wiltshire warned that this was not just an American problem but GM was getting ready to close the IBC plant in Luton.
He said: ‘The unions have to tackle the problem of bankrupt firms.
‘They have to be taken over and nationalised. That means workers occupying plants.’