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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.

Former Fisker CEO has some advice for Tesla Motors

Former Fisker Automotive CEO and ex-Chevrolet Volt vehicle-line director Tony Posawatz has some words of caution for Tesla Motors. The long-time automaker executive questions the California automaker's long-term viability – and gives some praise – in a talk with Benzinga, which you can listen to below. While the all-wheel-drive D that Tesla unveiled earlier this month in Southern California wowed a packed crowd, Posawatz (starting at around minute 4:45 in the interview) says Tesla would've been better off taking the resources it expended toward that Model S upgrade and directed them towards speeding up the development of a more affordable plug-in. Perhaps a number of investors agreed, since the company's stock fell the day after the D was announced. Posawatz says Tesla has been over-reliant on the sale of ZEV credits. Posawatz also says that Tesla has been over-reliant on the sale of zero-emissions vehicle credits in California for its earnings and questions whether the automaker will ever work at a large enough scale to sufficiently drive down costs and make consistent profits. Tesla CEO Elon Musk would take issue with this characterization. Posawatz first made his mark in the plug-in vehicle world when he was the vehicle-line director at General Motors for the Volt extended-range plug-in from 2006 to 2012. Later that year, he joined extended-range plug-in maker Fisker Automotive as its CEO, though quit that job during the summer of 2013 as the company was descending into insolvency. He joined the Electrification Coalition this past March. News Source: Benzinga Green Chevrolet Fisker Tesla Electric PHEV Tony Posawatz

Chevy says not to look at the 2019 Silverado's fuel economy rating

The 2019 Chevy Silverado is hitting dealerships soon, and one of the most notable changes for the new full-size pickup is the addition of a 2.7-liter turbocharged inline-four. The engine replaces the naturally-aspirated 4.3-liter V6 in volume consumer models like the Silverado LT and promises more power, less weight and — most importantly — better fuel economy. The thing is, the gains in efficiency haven't been as dramatic as some might have hoped, especially when stacked up against competitors from Ford and Ram. As Automotive News reports, GM's response is a little murky. First, let's talk numbers. We're pulling all figures from FuelEconomy.gov, the official U.S. government source for fuel ratings. Fuel economy numbers on trucks vary greatly based on a number of factors. Bed and cab configuration play a part, but so does a four-wheel-drive system. You also have to factor in tires, transmissions, rear-axle gearing, hybrid systems and cylinder deactivation. Things like that can make the difference between best- and worst-in-class. The EPA's website doesn't give enough information a lot of the time, so there's really no easy way to compare apples-to-apples. First, take a look at the ratings for the 2019 Silverado. A 2.7-liter model with two-wheel drive is rated 20 city, 23 highway and 21 combined. That's both better and worse than a two-wheel drive 2018 Silverado with the 4.3-liter V6 (18 city, 24 highway and 20 combined). The updated 2019 Silverado with a 4.3-liter V6 has yet to be rated. With less weight and a smaller engine, many hoped Chevy would make bigger gains. It's unusual to see any decrease in a fuel economy metric these days. GM says that it's not done tuning the new 2.7-liter engine, so fuel economy could theoretically increase. Expanding further, a V8-powered 2019 Silverado (17 city, 24 highway and 19 combined) actually gets better highway fuel economy than a turbocharged four-cylinder powered truck in certain configurations, even if the latter has a better overall average. But that's only with two-wheel drive, the 8-speed transmission and cylinder deactivation. A Silverado with the 5.3-liter V8 and a 6-speed automatic is rated at 15 city, 22 highway and 17 combined. The biggest issue with the Silverado 2.7-liter doesn't come from within GM itself but from Ford and Ram. GM cites the Ford F-150 with the 3.3-liter V6 and the Ram 1500 with the 3.6-liter V6 as the closest competitors to its new 2.7-liter inline-four.