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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.

Carmakers ask Trump to revisit fuel efficiency rules

Car companies operating in the US are required to meet stringent fuel efficiency standards (a fleet average of 54.5MPG) through 2025, but they're hoping to loosen things now that President Trump is in town. Leaders from Fiat Chrysler, Ford, GM, Honda, Hyundai, Nissan, Toyota and VW have sent a letter to Trump asking him to rethink the Obama administration's choice to lock in efficiency guidelines for the next several years. The car makers want to revisit the midterm review for the 2025 commitment in hopes of loosening the demands. They claim that the tougher requirements raise costs, don't match public buying habits and will supposedly put "as many a million" jobs up in the air. The Trump administration hasn't specifically responded to the letter, although Environmental Protection Agency nominee Scott Pruitt had said he would return to the Obama-era decision. The automakers' argument doesn't entirely hold up. While the EPA did estimate that the US would fall short of efficiency goals due to a shift toward SUVs and trucks, the job claims are questionable. Why would making more fuel efficient vehicles necessarily cost jobs instead of pushing companies to do better? As it is, even a successful attempt to loosen guidelines may only have a limited effect. All of the brands mentioned here are pushing for greater mainstream adoption of electric vehicles within the next few years -- they may meet the Obama administration's expectations just by shifting more drivers away from gas power. This article by Jon Fingas originally appeared on Engadget, your guide to this connected life. Related Video: News Source: ReutersImage Credit: Daniel Acker/Bloomberg via Getty Images Government/Legal Green Chrysler Fiat GM Honda Hyundai Nissan Toyota Volkswagen Fuel Efficiency CAFE standards Trump

Chrysler appoints new heads of Alfa Romeo and Ram

Chrysler has announced to two key appointments to its senior leadership, both of them taking immediate effect. First up is Reid Bigland, who has been named head of the Alfa Romeo brand for North America. Bigland has served until now as head of the Ram Truck brand, a portfolio he now hands over to Robert Hegbloom, who had served until now as its director.
As a result of the appointments, both Bigland and Hegbloom will take up seats on Chrysler's NAFTA Leadership Team, and Bigland will also join the Fiat Chrysler Group Executive Council - the highest decision-making body in the Fiat Chrysler Automobiles empire.
As per Sergio Marchionne's leadership style, Bigland will continue to serve in two major capacities, maintaining his role as president and CEO of Chrysler Canada. Other senior executives who hold multiple key portfolios include Harald Wester (who serves as the group's Chief Technology Officer and also overseas Alfa Romeo, Maserati and Abarth), Olivier Francois (group Chief Marketing Officer and head of the Fiat brand) and Michael Manley (head of the Asia-Pacific region and the Jeep brand).