General Motors said Monday that it planned to idle five factories in North America and cut several thousand blue-collar and salaried jobs in a bid to trim costs.
The action follows similar job-cutting moves by Ford Motor in the face of slowing sales and a shift in consumer tastes, driven in part by low gasoline prices.
The five G.M. plants will halt production next year, resulting in the layoff of 3,300 production workers in the United States and 3,000 in Canada. The company also aims to trim its salaried staff by 8,000.
“We are taking this action now while the company and the economy are strong to keep ahead of changing market conditions,” Mary T. Barra, G.M.’s chief executive, said in a conference call.
The plants include three car factories: one in Lordstown, Ohio, that makes the Chevrolet Cruze compact; the Detroit-Hamtramck plant, where the Chevrolet Volt, Buick LaCrosse and Cadillac CT6 are produced; and its plant in Oshawa, Ontario, which makes the Chevrolet Impala. In addition, transmission plants in the Baltimore area and in Warren, Mich., are to halt operations.
The General Motors plant in Oshawa, Ontario, where G.M. Canada has its headquarters. The plant once had 40,000 workers, but has recently employed only a few thousand.CreditLars Hagberg/Agence France-Presse — Getty Images
Some of the affected plants could resume production, depending on the outcome of contract negotiations with the United Auto Workers union next year.
Investors welcomed the news, sending the company’s shares up more than 7 percent to their highest level since mid-July.
For the last several years, as gas prices have remained low, consumers have gravitated toward bigger, roomier vehicles like pickup trucks and sport-utility vehicles. Demand for small and midsize cars has plunged. Earlier this year, Ford said it would stop making sedans for the North American market and announced cuts in its work force.
The companies have also paid a price for the tariff battle that President Trump set in motion. In June G.M. slashed its profit outlook for the year because tariffs on steel were driving up its costs. The company does not import a great deal of steel into the United States, but the increased demand for domestic steel has raised prices.
Ms. Barra said G.M. would set aside up to $2 billion in cash to pay for the job reductions, and take noncash charges against its pretax earnings of about $1.8 billion. The charges will affect earnings in the fourth quarter of 2018 and the first quarter of 2019.
Until last month, G.M. had been offering severance packages to entice salaried employees in North America to leave the company. In January, the company plans to cut additional white-collar jobs on an involuntary basis. Between the two actions, it aims to eliminate 8,000 salaried jobs, or about 15 percent of its white-collar workers in North America.
General Motors also said on Monday that it would stop production at two unspecified plants outside North America by the end of next year.