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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.

Dongfeng and PSA extend Chinese joint venture

BEIJING/PARIS — China's Dongfeng and Peugeot maker PSA are extending their business cooperation, despite the Chinese company reducing its stake in PSA to help smooth the French carmaker's merger with Fiat Chrysler Automobiles (FCA). Dongfeng said on Thursday it had agreed with PSA to extend the duration of their joint venture Dongfeng Peugeot Citroen Automobiles (DPCA). Under the deal, the venture could get the rights to PSA's new brands in China and will benefit from new technologies and intellectual properties, the Chinese company said. PSA was not immediately available for comment. The announcement comes a day after the companies said Dongfeng would reduce its 12.2% stake in PSA by selling 30.7 million shares to the French company. Analysts said the move could smooth U.S. regulatory approval for PSA's roughly $50 billion (GBP38.97 billion) merger with Italian-American carmaker FCA. The sale of Dongfeng's shares in PSA, worth around 680 million euros ($757 million), will leave the Chinese group holding around 4.5% of the merged PSA-FCA, which is set to become the world's fourth-biggest carmaker by sales volumes. "As the cooperation between Dongfeng and PSA deepens, we expect the joint venture to continue making good progress in China," a Dongfeng representative said. On a conference call, Dongfeng said DPCA would have exclusive rights to PSA's Opel cars should the partners agree to bring the brand to China, and enjoy lower prices on car parts imported from PSA. Earlier this year, a document seen by Reuters showed Dongfeng and PSA plan to cut jobs at Wuhan-based DPCA and reduce its number of car plants to try to make the venture more profitable. Chrysler Dodge Fiat Jeep RAM Citroen Peugeot China FCA PSA Dongfeng

Audi gets Q2 and Q4 badges in trademark swap with FCA

Audi has swapped trademarks with Fiat Chrysler Automobiles to snare the rights to the Q2 and Q4 badges for upcoming crossover SUVs. Audi CEO Rupert Stadler confirmed at the Detroit Motor Show that the automaker had finally persuaded FCA to release the two names that would let Audi lock up the Q1 to Q9 badges for its growing SUV family. Audi already plans to drop the Q2 name onto its MQB-based city crossover five-door this year, while the Q4 badge will slot onto the rump of a coupe-like version of the next Q3. It will also reserve the Q1 badge for a 2018 baby crossover, based around the architecture of the next A1 hatch. The A1 will share a lot of its engineering with Volkswagen's Polo-based soft-roader, dubbed T-Cross in concept form. The German company has also pounced on the naming rights for SQ versions of all of its Q-cars, along with F-Tron to cover the day when it pushes hydrogen fuel cell cars into production. Stadler insisted that no money had changed hands in order to pry the two badges off FCA, admitting that they had "each found something we needed." "We promised each other we wouldn't disclose what it cost, but it was not something they were willing to sell," Stadler said. "We tried to get it years ago and they said 'No, never,' but there is never 'never' in business. ... This year I went back to them with a proposal and we talked and there were some negotiations and then we agreed to it." Those negotiations are believed to have centered on a trademark swap with a Volkswagen Group name that FCA desperately (evidently) wants to use on a Fiat, Alfa Romeo, Chrysler, Dodge or Maserati. Asked if Audi had given FCA a trademark in return for Q2 and Q4, Stadler replied, "Something very much like that, yes." Audi has used Italian names on past concept cars that FCA could be interested in, such as the 2001 Avantissimo concept and the 2003 Nuvolari coupe. The latter was named after legendary pre-war racer Tazio, who won grands prix for both Alfa Romeo and Audi's forerunner, Auto Union. Both are unlikely trade chips, with laws in Europe preventing the trademarking of the names of actual people. There is always "quattro" (Italian for "four"), but after investing nearly four decades locking it in as an Audi all-wheel-drive name, it's just not anything like trade bait.