GM Shares were Briefly Halted over This Announcement

Shares of GM were briefly halted in Monday trading after the company announced that it would halt production at several plants and slash over 14,000 jobs.

GM said it plans to cut production at several factories in both the U.S. and Canada, and reduce its salaried workforce by 15s percent, which equals more than 14,000 employees.

The automaker’s restructuring will cost up to $3.8 billion. GM said that plants in Ohio, Maryland, Michigan, and Ontario, will be “unallocated” next year and it will stop operations at two other plants outside of North America by the end of 2019. Propulsion plants in Maryland and Michigan will also be winded down.

United Auto Workers have vowed to use “every legal, contractual and collective bargaining avenue” to fight the changes. “This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce,” said Terry Dittes, a UAW vice president who leads negotiations with GM.

Shuttering a plant is a matter of negotiation with the UAW, GM spokeswoman Stephanie Rice remarked. “We are announcing the cessation of certain products resulting in a number of plants being without allocated volume to produce,” she said.

Former GM Vice Chairman Bob Lutz commented on CNBC’s “Halftime Report”, “Nowadays GM looks at the hard reality, says we’ve got a demand problem on cars, what are we going to do about it. We have to shut some facilities and move production to truck plants.”

“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,” GM Chairman and CEO Mary Barra stated. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”

Disclaimer: We have no position in General Motors Company (NYSE: GM) and have not been compensated for this article.