GM lays off 15% of workforce, kills Volt, promises more EV investment

Seldom has the future of an industry turned sour so quickly. US automakers have enjoyed several years of record profits, but the wild ride is coming to a screeching halt as global trends point to a future of reduced demand, curtailed product lines and the need to invest large sums in new technologies.

As part of a major restructuring, GM has announced that it will cut 15 percent of its salaried workforce – almost 15,000 employees – and close down five factories in North America by the end of 2019. Following the leads of Ford and Chrysler, GM will discontinue most of its sedans, including the Chevrolet Cruze and the Chevrolet Volt PHEV, which will cease production by March 2019.

The coming transition to EVs is surely one part of the reason for the sweeping changes. “GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures,” the company said. CEO Mary Barra says GM plans to double its investment in EVs and self-driving technology.

However, other factors are probably having more impact. The growth of the overall auto market has stalled – US auto sales fell about one percent in 2017, according to Kelley Blue Book. Most of today’s auto buyers want trucks, SUVs and crossovers, so that’s where the Big Three plan to focus their resources (those who do want sedans are turning to Tesla, a trend that bodes ill for the German brands). President Trump’s trade war has delivered another major blow – GM said in June that new tariffs risked “undermining GM’s competitiveness against foreign auto producers by erecting broad brush trade barriers that increase our global costs.”

Mary Barra put a positive spin on the news: “The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future.” Wall Street seems to agree that the restructuring, which is expected to save the company some $6 billion, is necessary medicine – GM’s stock saw a substantial rise following the announcement.

“GM is making a big bet on a future that is autonomous, connected and electric,” said AutoTrader Analyst Michelle Krebs. “It has to be extremely profitable now to finance [that future] because no one knows when those vehicles will be commonplace.”

GM’s increased investment in EVs is welcome, but as Electrek’s Fred Lambert points out, “what they are announcing today on that front is very vague while the layoffs are very concrete.”

 

Source: Washington Post, Electrek

  • mzso

    These stupid americans just keep buying the stupid SUVs and trucks and such crap, none of them ever go off city roads or highways…

    • keith.myers

      I was considering replacing my 2013 Volt with a 2019. Guess not. Seems I will have to get a Tesla since I have no need for a truck or a SUV.

  • http://www.wififund.com EVman

    Wait for it !!! Yes, I personally spoke to one of the top people at GM about 3 months ago and they are going to focus on more than 20 new All Electric Vehicles and Hybrid Electric Vehicles over next 4 years. GM has a big surprise coming out next year and I think everyone will be very happy once they understand this new very cost effective technology from GM. I agree with GM on this new technology and decision and I feel the industry techs will agree with me when they see what is getting ready to happen. You can see tis new GM technology on website DIYev.com early next year.

    • Bob Fearn

      Yeah, good old GM. The guys that fought safety glass, seat belts, pollution controls and even now better mileage standards. GM? Forget them!!

  • SJC

    They are getting ahead of the next recession brought on by tariffs and debt.

  • Jon

    I am scrambling for a 10-month early exit from the lease of my 2017 Volt so I can buy a 2019 before all Volt production ends. Before the GM announcement, I was going to wait for a 2020 model. A BEV wouldn’t work for me and other PHEVs are inferior IMO.

    • Michael Walsh

      Wrong. You are still stuck in the old school, fuel mindset– that it is essential for range.
      I would wait for the next 10 months, exit your lease and watch carefully for all the new BEV models coming out. If you can stretch your budget to $34K to $45K I would seriously consider buying a preowned Model S with lifetime free supercharging.

      • Jon

        Please re-read my post. “A BEV won’t work for me.” We’re a one-car family and I don’t want to try to take long trips to northern New England and Canada while trying to arrange my itinerary around charging stations that do not exist now nor probably even in the near future – I don’t just drive the Interstates. I have 30K miles on my 2017 Volt, 80% of which are battery only. Not much of an uggggh in my book. I’m taking delivery of my new 2019 Volt this week in time to get the expiring $2500 MA rebate and Federal tax credit.

        • Michael Walsh

          How much is the 2019 VOLT?

          • Jon

            MSRP on the base LT model w/o options is $33,520. It qualifies for the $7500 Federal tax credit if delivery is taken by 31 March and in MA there is an additional $2500 cash rebate. So $23,520 before price negotiations with the dealer, who usually sells them at invoice (about 4% discount) plus tax, title, and fees and destination. The top Premier model starts at $38,120 MSRP plus options (loaded about $2K) and the same discounts apply.

  • Argovicus

    Forget GM, these guys can only scrap companies. Why did they kill Saab and Opel? Opel was in 1955 the largest car builder in central Europe! Even in 1985 they still had a market share of 20% !! I purchased Tesla shares. I believe in Geely! They are comming, already they produce electric cars in high quality and mass production! Geely’s subsidery Volvo is at the start ramp ready to make electric cars, it’s other subsidery, London Taxi has changed to 100% electric car propulsion.

  • joelado

    GM is not to be trusted. The Chevy Volt was the most successful plug-in hybrid in history. The biggest selling plug-in hybrid in history. Sold more than 50% of all the models that GM produced. Remember GM’s past concerning electric cars. The Bolt will be the next vehicle to go.

    https://youtu.be/nsJAlrYjGz8