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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.

GM Recalls 218,000 Chevy Aveo Models Over Fire-Prone Lighting

The recall train keeps on rolling for General Motors. Hot on the heels of its recent 2.4 million-vehicle recall of various models, it's now calling in 218,000 Chevrolet Aveo units from the 2004-2008 model years because they could catch fire. The problem concerns the daytime running light module in the instrument panel. It could overheat, melt and cause a fire. According to GM spokesperson Alan Adler, "We are aware of some fires," and the company "is still investigating." Adler wouldn't comment about how many fires were reported or when the automaker was first aware of this issue because of the ongoing analysis. However, he said the issue has not caused any injuries or fatalities. GM also doesn't have a fix for the problem with the DRL module yet. The company says in its recall statement to the National Highway Traffic Safety Administration that the remedy "is still under development." Adler wasn't sure when it would be ready, but he said Aveo owners would receive notification in the mail "relatively soon." They will receive a second letter later to schedule the repair. In a separate letter about the Aveo's problem to NHTSA (viewable here as a PDF), GM said its Executive Field Action Decision Committee decided to conduct the recall on May 16. Scroll down for the recall report. RECALL Subject : Daytime Running Light Module Overheating Report Receipt Date: MAY 19, 2014 NHTSA Campaign Number: 14V261000 Component(s): Potential Number of Units Affected: 218,000 Manufacturer: General Motors LLC SUMMARY: General Motors is recalling certain model year 2004-2008 Chevrolet Aveo vehicles equipped with daytime running lights (DRL). In the affected vehicles, there may be heat generated within the DRL module located in the center console in the instrument panel, which could melt the DRL module. CONSEQUENCE: If the DRL module melts due to the heat generation, it could cause a vehicle fire. REMEDY: The remedy for this recall campaign is still under development. The manufacturer has not yet provided a notification schedule. Owners may contact General Motors customer service at 1-800-222-1020 (Chevrolet). General Motors recall number for this campaign is 14236. NOTES: Owners may also contact the National Highway Traffic Safety Administration Vehicle Safety Hotline at 1-888-327-4236 (TTY 1-800-424-9153), or go to www.safercar.gov.

GM recalling over 40,000 Chevy, Pontiac and Saturn models over fuel pump woes

The National Highway Traffic Safety Administration has issued a recall for a number of General Motors cars and crossovers bought or currently registered in the hot-climate states of Arkansas, Arizona, California, Nevada, Oklahoma and Texas. As many as 40,859 units consisting of the 2007 Chevrolet Equinox, Pontiac Torrent and Saturn Ion and the 2007-2009 Chevrolet Cobalt (shown) and its Pontiac G5 twin are being recalled for potential fuel leaks.
This recall is being issued due to potentially faulty fuel pump components that can crack and cause gasoline to leak from the return or supply ports and possibly cause a fire. NHTSA has not indicated how many fuel leaks or vehicle fires have been reported. As a fix, GM will replace the fuel pump modules on all affected vehicles free of charge. Since Pontiac and Saturn have been shuttered, owners will be able to go to another GM-brand dealership to have their vehicles repaired.
While the list of affected cars and crossovers varies by state and model year, if you own any of these models and live in Arizona, California, Florida, Nevada, Oklahoma or Texas, be sure to check the official notice below for more details.