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GM to cut production at 5 plants in North America, kill several models

DETROIT/WASHINGTON — General Motors Co said on Monday it will cut production of slow-selling models and slash its North American workforce in the face of a stagnant market for traditional gas-powered sedans, shifting more investment to electric and autonomous vehicles. The announcement is the biggest restructuring in North America for the U.S. No. 1 carmaker since its bankruptcy a decade ago. GM said it will take pre-tax charges of $3 billion to $3.8 billion to pay for the cutbacks, but expects the actions to improve annual free cash flow by $6 billion by the end of 2020. GM plans to halt production next year at three assembly plants: Lordstown, Ohio, Hamtramck, Michigan, and Oshawa, Ontario. The company also plans to stop building several models now assembled at those plants, including the Chevrolet Cruze, the Cadillac CT6 and the Buick LaCrosse, the sources said. Sources said the Chevrolet Volt, Impala and Cadillac XTS would also be discontinued. Signs of the demise of six passenger-car models have been swirling since July. Plants in Baltimore, Maryland, and Warren, Michigan, that assemble powertrain components have no products assigned to them after 2019 and thus are at risk of closure, the company said. It will also close two factories outside North America, but did not identify those plants. The AP reported that 14,700 jobs would be affected. Some 8,100 of those would be white-collar jobs reduced through buyouts or layoffs. The No. 1 U.S. automaker signaled the latest belt-tightening in late October when it offered buyouts to 50,000 salaried employees in North America. The company also said it will cut executive ranks by 25 per cent to "streamline decision making." Some 6,000 factory workers could lose their jobs or be transferred to other plants. Its shares were last up 6.2 percent at $38.16. Tariff 'headwinds' and cost-cutting GM Chief Executive Officer Mary Barra told reporters on Monday the company can reduce annual capital spending by $1.5 billion and increase investment in electric and autonomous vehicles and connected vehicle technology because it has largely completed investing in new generations of trucks and sport utility vehicles. Some 75 percent of its global sales will come from just five vehicle architectures by early in the 2020s. It plans to reduce annual capital spending to $7 billion by 2020 from an average of $8.5 billion a year during the 2017-2019 period.

2019 Cadillac Escalade Sport Edition goes dark for the L.A. Auto Show

Cadillac is taking a shallow swing at the L.A. Auto Show, which might have something to do with the churn and burn happening at the brand and at parent General Motors. The Escalade Sport Edition brings its dark hue to the West Coast shindig, a touch of anti-flash that's actually a pinstripe job. For $2,700, it installs Gloss Black Ice chrome on the grille, rear fascia, window surrounds, and body side moldings, and the otherwise optional 22-inch Midnight Silver wheels. That's the whole show. Available on three of the Escalade's four trims — Luxury, Premium Luxury, and Platinum — brand president Steve Carlisle said the Sport Edition comes "in response to customer and dealer demand for a dark and aggressive look." The least expensive 2WD Luxury model starts at $84,790, including destination, with orders commencing at the beginning of next year. For all that the package isn't, it is still a better deal than buyers got ten years ago, when the 2007 Escalade offered a similarly thin Sport Edition for $4,890. There are a few small changes for the Escalade line overall for 2019. The exterior colors Midnight Sky Metallic and Dark Granite Metallic leave the palette list, making room for Manhattan Noir Metallic and Shadow Metallic to join the list. In back, there's a hands-free tailgate with a logo light, standard on all trims. The Escalade Sport Edition represents both a beginning and an end for the model. The fourth-generation Escalade went on sale in 2014 as a 2015 model, and this is the first special edition it gets. This could be the last, too, since the fourth-gen money machine we called "Old, but not antiquated" in our Driver's Notes last month is expected to give way to a fifth-generation for the 2020 model year. Related Video:

Why Cadillac is willing to lose 43 percent of its dealers

Cadillac is offering about 400 dealers in the United States a lump sum of money to close down. That represents over 40 percent of Cadillac dealers in America. Offers start at $100,000 and top out at $180,000. The average offering is around $120,000. According to Automotive News, Cadillac chief Johan De Nysschen estimates it will cost the automaker around $50 million to close these dealers. Any dealer that chooses to remain open will have to submit to Cadillac's ambitious Project Pinnacle, which will divide dealers into incentive categories based on how many units they sell. "Every single Cadillac dealer will have the potential to earn significantly higher profits than they do today," says De Nysschen. Dealers have until November 21 to decide if they want to take the cash or submit to Project Pinnacle. A logical question: Why is Cadillac willing to spend $50 million to close down 43 percent of its dealers? First, GM's luxury brand has way more dealerships than it needs. Second, the 400 dealers with offers to shutter each sold 50 or fewer vehicles in 2015, representing just 9 percent of its sales volume in America. So, while closing these smaller dealerships may have a small initial impact on sales, it's not going to be a major hit to Cadillac. Related Video: News Source: Automotive News - sub. req.Image Credit: Gary Cameron / Reuters Cadillac Car Dealers Luxury Performance