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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.

Recharge Wrap-up: Volt makes up third of Quebec Chevy dealerships sales, Tesla seeks Aussie talent

A Chevrolet dealership in Quebec has had the Volt make up 35 percent of its sales so far this year. Bourgeois Chevrolet in Rawdon, Quebec received recognition for the feat at the 2014 Electric Vehicle Conference, where it won the award for Leading Plug-in Hybrid Electric Vehicle Dealership. To sell that many, Bourgeois Chevrolet had to import used Volts from the US, and keeps about 50 units on the lot in various configurations. The conference also saw Park Avenue Nissan of Brossard, Quebec win the Leading Battery Electric Vehicle Dealership Award, and Loch Lomond Mitsubishi of Saint John, New Brunswick receive the award for Electric Vehicle Dealership Inspiration. Read more at Green Car Reports. Tesla Motors has begun scouting Australian engineers as other automakers shutter operations there. Ford, General Motors and Toyota have announced that they will shut down their Australian factories, leaving behind a lot of unused talent. Tesla recently held a "Recruiting Open House" in Melbourne for engineers to fill positions at its plant in Fremont, CA, where they will be paired with other Aussie engineers already on staff. Read more at Green Car Reports, or at Motoring. Electric turbochargers may come to play a key role in making internal combustion engines more efficient. Valeo recently showed an electric turbo it plans to supply to an unnamed automaker at a fuel economy showcase event at the EPA's National Vehicle Emissions and Fuel Lab. Electric turbochargers have the advantage of greatly reduced lag when compared to exhaust-driven turbos. They also work well when paired with cylinder deactivation, providing a much-needed boost when driving on a grade, which can help reduce the need for cylinders to reactivate. Independence from the exhaust system also makes it easier to package the turbocharger wherever there is room. Read more from Navigant Research. US crude oil futures have dropped to their lowest in more than two years. Saudi Arabia cut oil costs for the US and raised them for Europe and Asia as the US has increased output. On November 3, US crude futures fell as much as 2.2 percent in New York. West Texas Intermediate closed at $78.78, the lowest since June 2012. Brent crude slipped $1.08 to $84.78 a barrel. Read more at Bloomberg.

Chevy to offer new Cruze as a hatchback in the US

Chevrolet plans to offer a five-door hatchback version of the new Cruze in the United States, according to the latest intel from Automotive News. In addition to the sedan form we're familiar with, the outgoing Cruze was offered as a hatchback in some markets overseas, but not in America – a decision which Mark Reuss, GM's EVP in charge of product development, characterized as "a pre-bankruptcy planning mistake." The new Chevy Cruze is set to debut later this week. Although the American automaker has yet to confirm which bodystyles will be offered where, AN reports that a five-door model was already shown to dealers at their national meeting in Las Vegas last week. AN points out that the Ford Focus with which the new Cruze will be contending is offered as both a sedan and hatchback in America, with the latter accounting for some 40 percent of sales.