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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.

Weekly Recap: Geneva's splendor reflects growing demand for ultra-luxury cars

Geneva is one of the most glittering auto shows in the world, but the list of high-powered and bespoke luxury cars was decadent this year even by the rich standards of the Swiss exhibition. It's great for enthusiasts to revel in the flame-throwing Aston Martin Vulcan, the racing-inspired elegance of the Bentley EXP 10 Speed 6 concept and the insane performance of the Lamborghini Aventador LP 750-4 Superveloce, but there's a reason for all of this opulence: the luxury market is big business. And it's growing. IHS Automotive forecasts that so-called ultra-premium sales will nearly triple this decade from 123,000 to 353,000 units around the world. The estimate includes brands like Aston Martin, Bentley, Ferrari and Rolls-Royce, but doesn't count BMW, Mercedes and Audi, which offer less expensive models in addition to their high-end flagships. Though IHS includes Porsche and its relatively large volume in the study, the ultra-premium segment is still set grow at about the same rate, even without the German automaker's figures. So what is propelling all of this growth in the most expensive segment of the auto industry? Put simply, there's more rich people. IHS Automotive principal analyst Tim Urquhart pointed to economic expansion in China, market recovery in the United States and a surge in the lucrative technology sector as contributing factors. This dovetails with a research report by UK-based Oxfam, an international relief organization, which found the world's richest one-percent owned 48 percent of global wealth in 2014, and it's expected to increase to more than 50 percent by 2016. View 17 Photos Carmakers are moving quickly to capitalize with new products, expanding their portfolios with low-volume speedsters like the 800-hp V12 Vulcan at Geneva, and plans to enter new segments, like Rolls-Royce's strategy to make an SUV. "Ultra-premium carmakers are looking to explore ways of growing their product offerings, and thus their bottom lines, in this most potentially profitable of segments," Urquhart wrote in a report on the Geneva show. In a nutshell, there are more choices for people with more money. It's a good time to have expensive taste. Other News & Notes 2016 Mazda MX-5 Miata production launches It won't be long now. The 2016 Mazda MX-5 Miata arrives later this year, and it's officially in production. Mazda announced this week that the roadster began rolling off the assembly line at its Ujina factory in Hiroshima, Japan.

Chevy Spark EV will go on sale in Maryland

The single-charge range of a Chevrolet Spark electric vehicle may not blow away anyone who's used to driving on a topped off tank of gas. But a full charge will actually get a Spark EV about halfway across the state of Maryland. Which is good because that state will be the first on the East Coast to sell the battery-electric model. General Motors said this week that Chevy Spark EV sales will start in Maryland this spring, and that federal and Maryland tax credits will get the out-of-pocket price of the Spark EV below the $18,000 threshold. GM took the opportunity to tout the Spark EV's 119 miles per gallon equivalent rating and says Maryland has sufficient charging infrastructure for drivers to welcome the EV without too much trouble. Last June, Spark EV distribution was reported to be ready to extend beyond the Pacific Coast. Specifically, Ohio was thought to be next in line to get Spark electric vehicles after four state car dealerships listed the model on their websites. GM's Randy Fox, however, quashed that real quick, saying only California and Oregon had sufficient infrastructure to support the Spark EV. GM first announced the Spark EV for public (or at least American) consumption back in 2011. Last year, the General sold 1,145 Spark EVs, up 87 percent from 2013. For more on the Maryland expansion, take a look at GM's press release below. Chevrolet Spark EV Plugs into Maryland Customer demand drives addition of East Coast; features locally sourced drive unit 2015-01-22 WASHINGTON, D.C. – Chevrolet will start selling the Spark EV in Maryland this spring, expanding the pure electric mini-car's "range" to the East Coast. The Spark EV is the most efficient U.S. retail electric vehicle on the market, delivering an EPA-estimated combined city/highway 119 MPGe fuel economy equivalent and 82 miles of EPA-estimated combined city/highway range. It is priced as low as $17,845, after federal and Maryland tax credits – and it features a locally sourced electric motor and drive unit, manufactured at General Motors' Baltimore Operations facility in White Marsh, Md. "The Spark EV has been one of the most well-received electric vehicles in the industry and customer demand helped make the decision to expand its availability to Maryland," said Steve Majoros, Chevrolet director of car marketing.