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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.

GMC Acadia goes big again? Spy photos show next-gen prototype

GMC is testing what looks a lot like a new full-size SUV, signaling the likelihood that it will return to full-size segment after the current generation has run its course. GM downsized the Acadia for the 2017 redesign, carving nearly 10 inches off its length and 3 inches from its girth. For the next generation, it appears that script will be aggressively flipped.  The hierarchy of GM's unibody family SUVs was already a bit wonky before the Acadia's 2017 redesign, and continues to be now. While it would be logical for the Chevrolet Traverse, GMC Acadia, Buick Enclave and Cadillac XT6 — all three-row crossovers — to be different skins on the same fundamental chassis, that's not actually the case. The Acadia is a full foot shorter than either the Traverse or Enclave, with the XT6 falling in between. Based on these photos, that will no longer be the case when the new GMC Acadia debuts. Since the current one went on sale in 2016 as a 2017 model, it's about due for a replacement.  We can't see much beyond basic proportions here, but those tell a clear story. It's pretty obvious that the hood on the prototype is wider and sits higher than on the current car, with perhaps less slope to the now-wider nose. We can also see the faintest impressions of creasing on the flanks, likely leading to the same broad, angular hip treatment present on the current car. Viewed side-by-side, we can see a little more front and rear overhang. There's no obvious hint of substantially longer wheelbase here (the rear doors line up almost perfectly), so we're probably looking at something that is wider but not necessarily much longer.  In any event, we shouldn't have to wait too long to find out exactly what GM has in store for its "Pro" brand.  Related video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

UAW rejects GM contract proposal but makes a counter offer

The United Auto Workers union said a new comprehensive offer made by General Motors Co late Monday to end a two-week-old strike was not acceptable and said it had made a new counterproposal. UAW vice president Terry Dittes said in a letter to members "there are many important issues that remain unresolved." The union is awaiting GM's next proposal. He said GM's offer came up short on many issues.  Dittes said GM made a "comprehensive proposal" at 9:40 p.m. Monday. "This proposal that the company provided to us on day 15 of the strike did not satisfy your contract demands or needs. There were many areas that came up short like health care, wages, temporary employees, skilled trades and job security to name a few." Dittes is the union's vice president for GM relations and the UAW's lead negotiator in these contract talks. "We have responded today with a counterproposal and are awaiting GM's next proposal to the union," he wrote. "Regardless of what is publicized in print or social media, etc., there are still many important issues that remain unresolved." The strike, in its third week, has cost GM more than $1 billion, according to J.P. Morgan analyst Ryan Brickman. He said the cost per day in potential profit is $82 million. However, another analysis, by East Lansing-based consultant Anderson Economic Group, put the losses at $25 million a day. And the effects of the strike are expanding. GM said Tuesday the strike has created a parts shortage that forced the automaker to halt production at its pickup and transmission plants in Silao, Mexico, temporarily laying off 6,000 workers. Silao is where GM builds its highly profitable four-door crew cab Chevy Silverado and GMC Sierra pickups. The strike has also forced GM to idle some Canadian workers, and many suppliers have been forced to halt operations. About 48,000 UAW members went on strike on Sept. 16 seeking higher pay, greater job security, a bigger share of the leading U.S. automaker’s profit and protection of their healthcare.