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General Motors to stop production at 5 North American plants

By Neal E. Boudette

General Motors said Monday that it planned to idle three car plants and two transmission plants in North America and cut several thousand blue-collar and salaried jobs in a bid to trim costs as the auto sector slows.

The plants include a factory in Lordstown, Ohio, that makes the Chevrolet Cruze compact; the Detroit-Hamtramck plant, where the Chevrolet Volt, Buick LaCrosse and Cadillac CT6 are produced; and its plant in Oshawa, Ontario, which makes the Chevrolet Impala. The two transmission plants are in Baltimore and in Warren, Mich.

All five plants will halt production next year, resulting in the layoff of 3,300 production workers in the United States and 3,000 in Canada.

“We are taking this action now while the company and the economy are strong to keep ahead of changing market conditions,” Mary T. Barra, GM’s chief executive, said in a conference call.

Some of the affected plants could resume production, depending on the outcome of contract negotiations with the United Auto Workers union next year.

Investors welcomed the news, sending the company’s shares up more than 7 percent to their highest level since mid-July.

Ms. Barra said GM would set aside up to $2 billion in cash to pay for the reductions, and take noncash charges against its pretax earnings of about $1.8 billion. The charges will affect earnings in both the fourth quarter of 2018 and the first quarter of 2019.

Until last month, GM had been offering severance packages to entice salaried employees in North America to leave the company. In January, the company plans to cut additional white-collar jobs on an involuntary basis. Between the two actions, it aims to eliminate 8,000 salaried jobs, or about 15 percent of its white-collar workers in North America.

GM’s actions follow similar job-cutting moves by Ford Motor as new-vehicle sales have lost momentum because of a shift in consumer tastes.

For the last several years, as gasoline prices have remained low, consumers have gravitated toward bigger, roomier vehicles like pickup trucks and sport-utility vehicles. Demand for small and midsize cars has plunged.

Earlier this year, Ford said it would stop making sedans for the North American market and announced cuts in its workforce.

The companies have also paid a price for the tariff battle that President Trump set in motion. In June GM slashed its profit outlook for the year because tariffs on steel were driving up its costs. The company does not import a great deal of steel into the United States, but the increased demand for domestic steel has raised prices.

General Motors also said on Monday that it would stop production at two unspecified plants outside North America by the end of next year.

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