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5 reasons why GM is cutting jobs, closing plants in a healthy economy

DETROIT — Even though unemployment is low, the economy is growing and U.S. auto sales are near historic highs, General Motors is cutting thousands of jobs in a major restructuring aimed at generating cash to spend on innovation. It's the new reality for automakers that are faced with the present cost of designing gas-powered cars and trucks that appeal to buyers now while at the same time preparing for a future world of electric and autonomous vehicles. GM announced Monday that it will cut as many as 14,000 workers in North America and put five plants up for possible closure as it abandons many of its car models and restructures to focus more on autonomous and electric vehicles. The reductions could amount to as much as 8 percent of GM's global workforce of 180,000 employees. The cuts mark GM's first major downsizing since shedding thousands of jobs in the Great Recession. The company also said it will stop operating two additional factories outside North America by the end of next year. The move to make GM get leaner before the next downturn likely will be followed by Ford Motor Co., which also has struggled to keep one foot in the present and another in an ambiguous future of new mobility. Ford has been slower to react, but says it will lay off an unspecified number of white-collar workers as it exits much of the car market in favor of trucks and SUVs, some of them powered by batteries. Here's a rundown of the reasons behind the cuts: Coding, not combustion CEO Mary Barra said as cars and trucks become more complex, GM will need more computer coders but fewer engineers who work on internal combustion engines. "The vehicle has become much more software-oriented" with millions of lines of code, she said. "We still need many technical resources in the company." Shedding sedans The restructuring also reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. In October, almost 65 percent of new vehicles sold in the U.S. were trucks or SUVs. That figure was about 50 percent cars just five years ago. GM is shedding cars largely because it doesn't make money on them, Citi analyst Itay Michaeli wrote in a note to investors. "We estimate sedans operate at a significant loss, hence the need for classic restructuring," he wrote. The reduction includes about 8,000 white-collar employees, or 15 percent of GM's North American white-collar workforce. Some will take buyouts while others will be laid off.

How Chevy Silverado, GMC Sierra will take on the Ford F-150 profit machine

FORT WAYNE, Ind. — When General Motors engineers were developing the 2019 Chevrolet Silverado and GMC Sierra pickup trucks, some of them joined public tours of Ford's Dearborn, Mich., factory to watch aluminum-bodied F-Series trucks go down the assembly line. The redesign of the Ford F-Series trucks, launched in 2014, set a new standard for fuel economy and lightweight vehicle construction. But armed with stopwatches and trained eyes, the GM engineers believed they saw problems. "They had a real hard time getting those doors to fit," Tim Herrick, the executive chief engineer for GM truck programs, told Reuters. His team did more intelligence gathering. They bought and tore apart Ford F-Series doors sold as repair parts. Their conclusion: GM could cut weight in its trucks for a lower cost using doors made of a combination of aluminum and high-strength steel that could be thinner than standard steel, shaving off kilograms in the process. These pounds-and-pennies decisions will have major implications in the highest-stakes game going in Detroit: dominance in the world's most profitable vehicle market, the gasoline-fueled large pickup segment. What's more, GM is banking on strong sales of overhauled 2019 Silverados and GMC Sierras to fund its push into automated and electric vehicles — a business many investors see as the auto industry's long-term future. The risks are high given the hits automakers have taken from U.S. President Donald Trump's trade policies. Rising aluminum prices spurred by Trump's tariffs are driving up costs on the Ford's F-Series, while rising steel and aluminum prices likewise drag on GM results. GM also has a significant risk should the United States, Mexico and Canada fail to agree on a new NAFTA trade deal, given GM trucks built at its Silao, Mexico, factory could face a 25 percent tariff if NAFTA collapses. Major profit per truck Interviews with GM executives and a tour at its factory here in northwest Indiana provide a detailed look inside GM's plan for the most important vehicles in its global lineup. These big pickups are everything Tesla's Model 3 or Chevy's Bolt electric car is not. The mostly steel body is bolted to the truck's steel frame, rather than the one-piece body and frame electric vehicles. The majority of trucks will have a V-8 gasoline engine powering the rear wheels — like the classic GM cars of the 1950s. Some Silverados will have new four-cylinder engines, but there is no electric or hybrid offering as of now.

Recharge Wrap-up: Range-extended EV taxis in London, 2016 Chevy Volt interior two years old

The first Metrocab range-extended EV taxis are operating on the streets of London. The cabs use a 12.2-kWh battery and two 50-kW motors, as well as a 1.0-liter gasoline range extender. Fuel economy is 98 MPGe on the ECE101 cycle, and total driving range is over 348 miles before needing to charge or refuel. Cabbies can expect to save GBP20 to GBP40 (about $30 to $60) per day on average. "The cash savings on fuel are significant, the ride and comfort outstanding, and my first customers are thrilled with the new cab," says the first operator of the new EV taxi, Preston Morris. "With its air suspension providing unrivaled comfort, panoramic glass roof for views of the city and silent powertrain, what's not to like?" Read more in the press release below. Chevrolet has had the interior design of the 2016 Volt finished for two years already, according to GM interior designer John McDougall. Beginning around 2010, GM received sketches from designers worldwide before narrowing it down to a handful of designs. Then the top three choices were molded from clay. The chosen theme was then refined for up to 18 months. "Every little thing you can imagine goes into that," says McDougall. "The glare angle from the windows, the placement of the controls, the placement of the seat. You have to create something that's beautiful and functional." Read more at GM Authority and at Inside EVs. More details have emerged about the Second Life Batteries Alliance. Vattenfall has announced a research project in partnership with BMW and Bosch to use retired EV batteries for stationary, grid-connected energy storage in Hamburg, Germany. Over 100 lithium-ion batteries from BMW i3 and ActiveE vehicles will make up a two-mWh storage unit for grid balancing, enough to power 30 four-person households for a week. The system is "compact enough to fit in a small building," says Bosch. Such storage systems are especially fit for storing and moving alternative forms of energy, which often fluctuate in supply more than electricity from a traditional power plant. Vattenhall will operate the storage unit for 10 years, with Bosch managing the batteries, during which time the three partners hope to learn more about battery applications and their performance over time. Read more at Green Car Congress, or in the press release below.