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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.

Hummer EV to be sold at only about half of GMC dealerships

The new 1,000-horsepower Hummer EV will be sold under the GMC brand, but you won't find it in every GMC showroom. Currently, just about half of GMC's dealers have agreed to take on the electric truck, Buick GMC VP Duncan Aldred told investors on a conference call last week. According to Muscle Cars and Trucks, there are a number of reasons for the irregular availability. For one, there's the cost of upgrading dealerships to sell and service a fully electric vehicle. Stores would need to be upgraded with charging stations, and service centers would require new tools and training to work on an EV. Then there's the customer experience. At $112,595, the initial Hummer EV Edition 1 caters to a different clientele than the traditional GMC truck. The planned EV3X trim level that arrives in late 2022 and EV2X arriving in spring 2023 will start at just below $100,000 and $90,000, respectively. Some sellers believe that customers paying six figures for a vehicle will expect certain niceties that will necessitate showroom upgrades as well. Complimentary doughnuts, at least. Furthermore, not all GMC dealerships are located in areas with customers willing to shell out that much cabbage for a new vehicle, especially an EV. An $80,000 base trim will be available in 2024, so perhaps more dealers will be willing to take on the truck by then. Finally, there's the Hummer EV's no-haggle pricing. Aldred was adamant on the call that customers see the same price on the internet as they do on the paperwork. It's part of the premium dealership experience that GMC wants to provide for its well-heeled clientele. Still, GMC appears to have no problem moving all the Hummer EVs it can build. Even with its lofty price tag, all Edition 1 trucks were sold out 10 minutes after GMC's announcement. Related Video:

Electric Hummer is official, and Tesla's got momentum | Autoblog Podcast #612

In this week's Autoblog Podcast, Editor-in-Chief Greg Migliore is joined by Senior Editor Alex Kierstein and Senior Editor, Green, John Beltz Snyder. They start things off with a discussion of the week's news: GMC is launching an electric Hummer truck with a Super Bowl ad, and Tesla was profitable in Q4, sending its stock soaring. Then they talk about what they've been driving, including a super badass Mercedes-Benz Sprinter, the Kia Telluride and their long-term Volvo S60 PHEV. There's no "Spend My Money" segment this week, so send in your questions for future podcast episodes. Autoblog Podcast #612 Get The Podcast iTunes – Subscribe to the Autoblog Podcast in iTunes RSS – Add the Autoblog Podcast feed to your RSS aggregator MP3 – Download the MP3 directly Rundown Hummer returns as electric GMC truck Further reading: Grappling with the dark side of EVs Tesla profitable for second straight quarter Cars we're driving: Mercedes-Benz Sprinter 3500XD Kia Telluride (whose safety tech won Autoblog's 2020 Technology of the Year Award) Long-term Volvo S60 T8 update Feedback Email – Podcast@Autoblog.com Review the show on iTunes Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.