G.M. to Idle Plants and Cut Thousands of Jobs as Sales Slow – The New York Times

Closing auto plants outright — rather than idling them, as G.M. says it plans — has been rare since the industry emerged from the recession. The last permanent shutdown of a plant in the United States came in 2016 when Mitsubishi Motors shuttered one in Normal, Ill. Before that, Ford closed a truck plant in St. Paul in 2011.

More typically since rebounding from the recession, carmakers and their suppliers have restarted shuttered plants, adding new ones across the South and hiring tens of thousands of workers a year.

But demand for small and midsize cars has plunged. Two-thirds of all new vehicles sold last year were trucks and S.U.V.s. That shift has hit G.M.’s Lordstown plant hard. Just a few years ago, the factory employed three shifts of workers to churn out Chevy Cruzes. Now it is down to one. In 2017 the plant made about 180,000 cars, down from 248,000 in 2013.

More broadly, the yearslong boom in car and truck sales in North America appears to be ending, said John Hoffecker, vice chairman at AlixPartners, a global consulting firm with a large automotive practice. “Sales have held up well this year, but we do see a downturn coming,” he said. AlixPartners forecast that domestic auto sales will fall to about 15 million cars and light trucks in 2020, from about 17 million this year.

Even though they are facing a potential slump, carmakers continue to spend heavily to develop electric vehicles and self-driving technology, both to meet regulatory mandates and to anticipate the future of driving. That shift is expected to remake the global industry and enable companies to enter new and potentially lucrative businesses, such as driverless taxi and delivery services.

At the same time, automakers have had to contend with a new political agenda in Washington. One benefit has been the corporate tax cuts enacted last year. The changes, championed by Mr. Trump and his party, saved G.M. $157 million in federal taxes in the first nine months of the year, according to the company’s most recent quarterly earnings report.

The Trump administration has moved to scrap stringent emissions requirements put into place under President Barack Obama, but the industry hopes that Mr. Trump will relent and reach an agreement with California, which sets its own emissions requirements. Automakers are wary of having two sets of standards.

Before the election and after, Mr. Trump prodded Ford, G.M. and others to build plants in the United States instead of Mexico or China. As events have played out, however, his determination to rework the North American Free Trade Agreement is expected to have a modest impact on automakers, preserving much of the original 1994 accord.

The terms negotiated with Canada and Mexico stipulate that at least 75 percent of an automobile’s value must be produced in North America for a company to import it into the United States duty-free, and that 40 to 45 percent of a vehicle’s value must consist of parts made by workers earning at least $16 an hour, a provision aimed at shrinking Mexico’s wage advantage. Analysts believe the changes will have little to no effect on American jobs.

Over all, the American auto industry has added nearly 350,000 jobs since the industry bottomed out in the wake of the recession. But the industry still employs tens of thousands fewer people than before the crisis, and hundreds of thousands fewer than in 2000.

About 970,000 people worked in the United States auto industry in October, an increase of 12,800 since Mr. Trump took office. Most of that growth, however, came among manufacturers of recreational vehicles and trailers, as well as in auto parts. Through October, automakers like G.M. had cut about 7,000 jobs under Mr. Trump, government figures show. (Those numbers don’t include the hundreds of thousands of workers employed by auto dealers, repair shops and related industries.)

Ms. Barra said G.M. would set aside up to $2 billion in cash to pay for the job reductions announced Monday, 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.

Ian Austen and Ben Casselman contributed reporting.

A version of this article appears in print on , on Page A1 of the New York edition with the headline: G.M. to Eliminate Some 14,000 Jobs At Five Factories. Order Reprints | Today’s Paper | Subscribe