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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.

GM again delays plant that will build the Silverado EV

  General Motors Co. will again push back the planned opening of an electric pickup truck plant in suburban Detroit and has delayed a Buick plug-in amid uncertain growth in battery-powered car sales. Mary Barra, the company’s chief executive officer, told analysts Tuesday on an earnings conference call the automaker is postponing until mid-2026 the opening of its Orion Assembly factory, which will make the Chevrolet Silverado EV. This is the second delay for the plant, which was originally slated to start production in late 2024. Shares of the automaker fell 4.1% to $47.52 as of 9:39 a.m. in New York. The stock is up about 32% so far this year. The delay is a main reason why GM wonÂ’t be able to meet its previous goal of having production in place to make 1 million EVs by the end of next year. The company said they will add production as buyers show more interest in electric vehicles. “We continue to make sure we continue to scale the business to customers and where they are at,” GM Chief Financial Officer Paul Jacobson said on a call with reporters. GM reported on Tuesday a 60% jump in second quarter profit compared with a year ago, topping Wall StreetÂ’s expectations on strong demand for its traditional gas-powered trucks in the US market.

Both Android Auto and Apple CarPlay slated for Chevrolet lineup

Long awaited, the race among automakers to keep drivers connected to their smartphones has officially entered a new era. Hyundai said Tuesday it would be the first manufacturer to put Google's Android Auto into a production car, the 2015 Hyundai Sonata sedan. Not to be outdone, General Motors said today it'd offer both Android Auto and Apple's CarPlay on several Chevrolet models set to hit dealerships this summer. By giving car buyers the choice between these rival phone-projection systems, Chevrolet hopes to quell concerns from prospective customers worried about the compatibility of their smartphones and vehicles. "It's about providing choice," said Alicia Boler-Davis, GM's senior vice president for global connected car consumer experience. "No two customers are alike, and we cannot expect a single solution that works for every driver in every situation." Across the industry, automakers are rushing to add both to their cars as a growing base of customers seek an array of connected features. Estimates from automotive technology research firm SBD indicate smartphone-integrated content is available in 36 percent of current vehicles, and the company expects that penetration rate will grow to 84 percent by 2025. For Chevrolet, the systems will be available on select 2016 iterations of the Cruze, Camaro, Volt, Spark and Malibu as early as next month, and appear on 14 Chevy models overall for the 2016 model year. They're available on all trim levels, but they only work with the company's MyLink infotainment package installed in the cars, and the first to hit showrooms will only work on the seven-inch touchscreen models. "CarPlay and Android Auto, these are things that are addressable to the broad market, and I think it makes a lot of sense for GM to put it into Chevys first," IHS Automotive senior analyst Mark Boyadjis said. Via physical connections, both Apple CarPlay and Android Auto allow users access to smartphone features like turn-by-turn directions, phone calls, voice-to-text messages and music streaming. Interfaces are similar to the ones found on the respective smartphones, but on the dashboard, they're redesigned for a simpler, in-car experience. Fonts are larger, for example, and easier to press on a touchscreen. CarPlay relies heavily on Siri so that drivers spend more time staring at the road instead of their touchscreen. That sounds good, at least in theory.