GM to close plant in Ontario, eliminating 2,500 jobs

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General Motors has announced plans to wind down operations at five North American factories, slashing costs in apparent preparation for a long-term downturn in the automotive industry.

The assembly plants pegged for closure are Oshawa Assembly in Oshawa, Ontario, Canada, Detroit-Hamtramck Assembly in Detroit, and Lordstown Assembly in Warren, Ohio.

The company has marked a sedan plant in Detroit, a compact vehicle plant in OH, and another assembly plant outside Toronto for possible closure.

GM's move marks the first rounds of United States plant closings since 2010, though the automaker has eliminated shifts and laid off workers at some USA plants since early 2017 - including at the Lordstown, Ohio, and Hamtramck, Michigan, plants now slated to be closed.

Youngtown is in a Democratic and labor stronghold, where Trump won over a surprising number of voters two years ago because of his promise to bring work back to the U.S.

GM said the moves will save $6 billion in cash by the end of next year, including $4.5 billion in recurring annual cost reductions and a $1.5 billion reduction in capital spending.

The restructuring reflects the changing USA and North American auto markets as a dramatic shift away from cars toward SUVs and trucks continues.

Canadian Prime Minister Justin Trudeau said he spoke with Barra and expressed "deep disappointment".

The company expects to gain 75 percent of its sales from only "five vehicle architectures" by "early the next decade", the news release states. The stock is still down about 7 percent this year.

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Five GM auto plants are operating at 37 percent capacity, according to the Center for Automotive Research.

The official said it is part of a global restructuring of GM as they shift focus to lower emitting hybrid vehicles, which is not the focus of the Oshawa plant.

GM jumped as much as 7.9 percent to US$38.75, the highest since July, as of 12:20 NY trading. Jobs will be hard to come by for laid-off workers.

Barra is reducing staff from operations that make conventional cars and hiring people who can design electric cars or add software prowess to GM Cruise, the automaker's autonomous vehicle unit in San Francisco.

As recently as 2012, passenger cars made up more than 50 percent of all United States new vehicle sales. In a statement made about the restructuring, GM specifically names crossovers, SUVs, and trucks as being a higher priority, growth wise, and their closure of a handful of facilities will allow for more focus on those models.

Trump has not yet responded to the announcement, but he encouraged a boycott of Harley-Davidson after the motorcycle company said it was moving some production overseas because of the tariffs. "Get a auto that is selling well and put it back in", Trump said.

In a statement, Detroit Mayor Mike Duggan described the news as "troubling" and said that the city's economic development team and the UAW union are "working together to come up with a solution that works for GM and the employees".

But as long as the tariffs remain in place, GM and other American automakers have little incentive to expand production and every incentive to find new supply chains and cost-cutting strategies to avoid the import taxes.