General Motors announces closure of 7 factories around world

The US flag flies at the headquarters of General Motors in Detroit on Nov. 19, 2018. EFE-EPA/ Jeff Kowalsky

The US flag flies at the headquarters of General Motors in Detroit on Nov. 19, 2018. EFE-EPA/ Jeff Kowalsky


General Motors on Monday announced the closure of seven of its factories around the world as part of a restructuring plan.

The automaker said in a statement that it will close two assembly plants in the US and one in Canada, along with two others in as-yet-unidentified countries.

The firm added that it will also close two production plants in the US.

The five North American plants affected by the move are the assembly plants in Detroit-Hamtramck and Lordstown, Ohio, as well as the one on Oshawa, Ontario, and the two engine and transmission production plants in Baltimore, Maryland, and Warren, Ohio, all of which employ some 14,500 people.

GM did not say in its statement how many workers will lose their jobs, but it emphasized that it is taking measures to reduce its payroll by 15 percent, including cutting its white collar executives by 25 percent to facilitate decision-making.

The firm’s statement read in part: “Today, GM is continuing to take proactive steps to improve overall business performance including the reorganization of its global product development staffs, the realignment of its manufacturing capacity and a reduction of salaried workforce.”

“These actions are expected to increase annual adjusted automotive free cash flow by $6 billion by year-end 2020 on a run-rate basis,” the statement said.

In addition to these plants, GM said that at the end of 2019 it will cease production at two other plants located outside North America, providing no further details but saying that it will do so in the very near future.

The closures come after the company announced it was shutting down its assembly plant in Gunsan, South Korea.

CEO Mary Barra told reporters that the firm is making the cuts “to get in front of it while the company is strong and while the economy is strong,” although the firm said it was not anticipating an economic downturn.

She added that the move is part of GM’s plan to become a more agile, resilient and profitable company, while giving it the flexibility it needs to invest in the future.

Barra also said that the firm recognizes the need to stay ahead of changing market conditions and consumer preferences so that GM can be successful over the long term.