General Motors announced an aggressive cost-saving plan Monday that will see it idle several manufacturing plants and lay off about 15 percent of its salaried staff. GM will also end production of several cars in early 2019, including the Volt plug-in hybrid and the Cruze compact. The automaker described the changes as key to transforming the automaker for the future. The moves are also expected to free up $6 billion in cash flow by the end of 2020.
"We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success," GM CEO Mary Barra said in a statement.
GM said it would not allocate new products to several production plants in 2019: Oshawa Assembly in Canada, Detroit-Hamtramck Assembly in Michigan and Lordstown Assembly in Ohio. Those plants primarily build cars, and GM said the changes are "in response to market-related volume declines in cars" as customers switch to SUVs and trucks.
Oshawa builds the Cadillac XTS and Chevrolet Impala; production of those will end in the fourth quarter of 2019. Detroit-Hamtramck builds the Chevrolet Volt, Chevrolet Impala, Buick LaCrosse and Cadillac CT6; production of the LaCrosse and Volt ends on March 1, 2019, with CT6 and Impala ending on June 1. Lordstown builds the Chevrolet Cruze, with production scheduled to stop March 1.
GM also said it plans to save money in the coming years by sharing more products across different vehicle platforms, noting that it expects 75 percent of its future sales volume to be built on just five platforms. And over the next two years, GM will double how much it spends on electric and autonomous vehicles. The automaker earlier this yearto ramp up EV sales across the nation.
In addition, the Baltimore Operations and Warren Transmission Operations transmission plants are affected by the announcements. On top of that, GM said it plans to close "two additional plants outside North America" by the end of next year.
As to staffing changes, GM says it will reduce the number of salaried staff by 15 percent and reduce the number of executives by 25 percent. Earlier this fall, GM offered buyouts to about 18,000 employees, according to Automotive News.
"These actions will increase the long-term profit and cash generation potential of the company and improve resilience through the cycle," CEO Barra said in a statement.