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GM will need to make more job cuts, analysts say

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In a report published Friday, the

Detroit Free Press

does the math and speaks with a number of analysts and economists who make the case that

General Motors

will likely need to make more job cuts beyond those already at stake as it plans to

end production at five plants

in the U.S. and



GM announced its restructuring in November

, saying it would end production of six slow-selling


built at three assembly plants and two powertrain plants. Taken with already planned reductions of around 8,000 white-collar positions, the restructuring could amount to more than 14,000 job cuts but will result in improving cash flow by $6 billion by the end of 2020 to

invest in innovation

, GM says.

The models being discontinued are the

Chevrolet Cruze




Volt plug-in hybrid


Cadillac XTS



; and the

Buick LaCrosse

. Those vehicles accounted for about 8 percent of GM’s total vehicle sales in 2018, the


finds, resulting in an annual loss in revenue of between $7 billion and $9 billion and as much as a full percentage point in lost U.S. market share.

That will necessitate further job cuts at plants around the country that make engines or engine components for those models, auto economist Jon Gabrielsen told the outlet, plus more if the people who previously bought its sedans take their business elsewhere. “Now that GM is lowering its sales and profits potential further through the elimination of these models and plants, I am raising my estimate of total metro Detroit GM salaried job losses to at least 10,000 over the next two years,” Gabrielsen said. “That is probably understated.”

GM says it plans to make up for that lost market share with boosts in sales of hot-selling




such as the all-new 2019

Chevrolet Silverado


GMC Sierra

pickups, the new 2019

Chevy Blazer

, plus a series of new


SUVs it plans to launch in the next three years. The automaker has also said it will need to

fill 2,700 jobs at other U.S. plants

, representing opportunities for displaced blue-collar workers.

But Gabrielsen notes that GM has lost 4 points of U.S, market share in


and SUVs over the past decade even as it has introduced a number of new models in those segments. He says that suggests new SUVs will only dilute sales volumes of its existing models, not help it build back lost market share.

Read the entire Freep story here


from Autoblog