General Motors plans to shut down its massive Oshawa, Ontario plant as part of an ongoing series of actions by the company to prepare for the next sales downturn.
The company is looking to remake its manufacturing footprint with an eye toward more battery-electric vehicles, which the Oshawa plant currently doesn’t produce. Oshawa has been rumored to be on the cutting block for some time now as the company has struggled to find products for the sprawling facility.
The other plant considered to be in danger as part of this reorganization is GM’s Lordstown, Ohio site. The company has cut production there repeatedly, moving from three shifts down to one shift now with 3,000 employees. The only thing keeping that site afloat is that it produces the Chevy Cruze small sedan.
The company also produces that vehicle in Mexico, but in light of the Trump administration’s volatility when it comes to tariffs on vehicles made outside of the U.S., there is no certainty the vehicles could become too costly to import from Mexico.
(Click Here to see why GM is closing an Ohio warehouse.)
The company offered early retirements to 18,000 white collar employees in North America recently as part of its far-reaching efforts to trim excesses in advance of the next down cycle. As of now, GM officials reportedly aren’t getting the numbers they’d hoped for with the first round of buyouts.
GM managers are reported to be holding informal meetings with those eligible for the buyouts to encourage them to take the offers. The company has implied that if it doesn’t get the response it wants, it will simply layoff people to get the desired number departures. GM officials have not confirmed this plan.
(GM looking at white collar layoffs due to low buyout response. Click Here for the story.)
CEO Mary Barra made the plan formal in an email employees on Oct. 31, but the details have been fuzzy. Part of the reason the company isn’t getting the numbers it wants, according to reports, is that the separation package is not enticing enough. Sources suggest it’s the standard package offered to employees who being fired.
Some employees are willing to go, but want a better offer to leave. Currently the offer is reported to be six months pay and six months health insurance.
(GM handily beats earnings forecasts, buoyed by truck sales. Click Here for the story.)
The company wanted to get 7,000 employees to take the buyouts, but the current number appears to be closer to 4,000, meaning another 3,000 will have be coaxed into accepting the plan or released.