DETROIT -- General Motors' plans to end production next year at five North American plants and slash salaried head count by 15 percent will not come without risks and consequences. It will have to navigate political headwinds and not overplay its hand during upcoming union negotiations.
While Wall Street praised the actions as cost-cutting measures that will save the automaker $6 billion by 2020, union and political leaders condemned the moves as shortsighted and a betrayal to its workers and government, which less than a decade ago bailed out the automaker from bankruptcy.
President Donald Trump said he was "not happy" with the decision and spoke "very tough" with GM CEO Mary Barra about the moves.
The UAW vowed to "confront" the decision "through every legal, contractual and collective bargaining avenue," while Canadian union Unifor President Jerry Dias promised "one hell of a fight here in Canada with General Motors."
GM did not announce the closure of the plants -- Oshawa Assembly in Canada, Lordstown Assembly in Ohio and Detroit-Hamtramck Assembly in Michigan -- but said it would not allocate any products. Propulsion plants in Maryland and Michigan also will not be given any product.
Not allocating product doesn't mean the plants will permanently close, but it puts their future and the jobs of roughly 6,700 hourly and salaried factory employees -- 3,800 in the U.S. and 2,900 in Canada -- at risk heading into contract negotiations with the UAW in 2019 and Unifor in 2020.
Doubling down
GM's actions are meant to increase the automaker's profits and strengthen its core business, while it doubles investment in autonomous and battery electric vehicles by 2020 -- a year before the automaker is expected to launch an all-new profitable electric vehicle platform.
"I think these actions demonstrate our continued focus on driving cost efficiencies and supporting the ongoing work to make General Motors more agile, resilient and profitable to position the company for long-term success," Barra told reporters on Monday.
