BREAKING NEWS

BREAKING NEWS

General Motors to close plants and cut jobs to cope with ailing market

 Comments
General Motors to close plants and cut jobs to cope with ailing market
Text size Aa Aa

US car giant General Motors has announced it will close five of its North American plants, slashing more than 14,000 jobs in a bid to streamline its operations.

Faced with a slump in car sales and rising costs, the carmaker's moves come as it focusses on its line-up of trucks, electric and self-driving vehicles.

Three other plants around the world will be closed by the end of 2019.

US President Donald Trump, who promised manufacturing jobs in the lead up to the 2016 election, said he was "not happy about it".

Speaking to reporters about the plans, which undercut his claims that his policies are spurring a revival in the US auto industry, Trump said: "They better put something else in."

Americans turning their backs on small cars

The restructuring of General Motors comes as the American market for its sedans and hatchbacks is shrinking.

Increasingly, consumers in the US are now turning to larger SUVs and trucks, which now make up nearly 70% of total US car purchases.

Car sales peaked in 2016 in the US, but recent rising costs - such as new tariffs on materials such as steel - have got GM preparing for the next down turn.

The company hopes its plan would help it save about $6 billion dollars (5.4 billion euros) by the end of 2020.

"The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future," said GM chair and chief executive Mary Barra.

"We recognise the need to stay in front of changing market conditions and customer preferences to position our company for long-term success."