General Motors is Laying Off Hundreds at Michigan Factory
The biggest automobile manufacturer in the U.S., General Motors Company, is eliminating one of the two shifts at its transmissions plant in the state of Michigan.
Nearly half of the workforce at the factory is expected to face layoffs after the shift is eliminated. The number of job cuts could be to the tune of 300.
The layoffs follow as the company downsizes its labor force to match lowered production. The biggest of the Detroit Three automakers has been witnessing declining sales since beginning of this year. To avoid having a stockpile of too many unsold cars, the company has decided to trim its output.
Prior to the current layoffs, GM’s last round of job cuts took place only two months ago, in March, when the company laid off 1,100 workers, also in Michigan.
The company started eliminating shifts at various factories in November and, since then, GM has taken the measure five times in less than seven months. A total of 5,000 jobs have so far been cut across factories in Ohio and Michigan. (Source: CNN, March 31, 2017, op cit.)
This recent round of downsizing, which began in November 2016, is the first within the United States since 2010. (Source: CNN, March 6, 2017, op cit.)
At the same time, the company has also started cutting jobs from its international workforce outside of the U.S., particularly in South Africa and Singapore.
American Automaker’s Sales Decline Due to Competition
GM is making efforts to cut costs as it loses out to competition. The automaker fell short of its sales target in the latest month. The company’s unit sales in May were down by 1.3%.
Management has identified the reason as customers’ shifting tastes. More Americans are buying bigger SUVs and crossovers, instead of passenger cars like sedans and coupes. This is why the company has particularly been facing declining unit sales of its passenger cars.
The Michigan factory, where the latest layoffs are taking place, produces transmissions for passenger cars.
America’s biggest automakers, General Motors, Ford Motor Company, and Fiat Chrysler Automobiles NV, have all been facing deteriorating sales at the hands of Japanese and German automakers. All three automakers have jointly laid off thousands of workers this year.
The last time General Motors saw declining sales was through the Great Recession of 2008, which lingered until 2010. The company managed to survive bankruptcy in the Great Recession after scoring hefty bailout packages from governments.
“GM announces more layoffs,” CNN, March 31, 2017.
“GM US auto sales down 1.3% in May,” MSN, June 1, 2017
“GM to cut another 1,100 jobs,” CNN, March 6, 2017.