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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 - Monday - Workers - North - America
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.
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.
Vehicle - Millions - Lines - Code - Resources
"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."
The reductions could amount to as much as 8 percent of GM's global workforce of 180,000 employees.
Restructuring - Auto - Markets - Manufacturers - Cars
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.
Sedans - Loss - Need - Restructuring
"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.
Factories - Workers - Jobs - US
At the factories, around 3,300 blue-collar workers could lose jobs in the U.S. and another...
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