General Motors to close four plants | News | Al Jazeera

General Motors to close four plants

Move follows rising oil prices and demand for environmentally sound vehicles.

    More than 73,000 GM workers went on strike last year
    over healthcare and job security issues [AFP]

    "While some of the actions ... are very difficult, they are necessary to adjust to changing market and economic conditions and to keep GM's US turnaround on track and moving forward," Wagoner said at a news conference.
    Wagoner also said that GM's board had approved production of the Chevrolet Volt, which runs on an electric motor and has a small engine to recharge its batteries, for entrance into the market at the end of 2010.
    Troubled firm
    Earlier this year GM reported a $38.7 billion loss for 2007, the largest ever annual loss for an automotive firm, following a slump in the north American market due to US economic turmoil.
    It also said it was to offer voluntary redundancy or early retirement options to about 73,000 unionised workers in a bid to cut labour costs.
    And in September last year more than 74,000 GM workers went on strike over healthcare costs and job security, returning to work after a deal was struck between the company and the United Auto Workers union.
    The four plants to be closed are in Oshawa, Ontario, in Canada; Moraine in the US state of Ohio; Janesville in the US state of Wisconsin and Toluca in Mexico.
    An estimated 2,500 workers at each of the four facilities will be affected, Wagoner told AP.
    Some analysts questioned whether the firm was moving too slowly in its attempt to return to profitability.
    "Unfortunately, it's just a sign that once again they're behind the curve," Peter Jankovskis, a chief investment officer with OakBrook Investments, told Reuters.
    "If they were looking to sell the Hummer brand, the more sensible thing would have been to do it three years ago. They're not going to get anything for it. Just in terms of timing, it's a very poor example."
    Many will reportedly be able to take jobs created when 19,000 more US hourly workers leave later this year through early retirement and buyout offers, GM said.
    However, some members of the Canadian Auto Workers union, which had recently ratified a new three-year contract with GM, called the latest announcement a betrayal.
    "We'll have approximately 2,600 of our members that won't have jobs by the end of 2009, yet we have a commitment from General Motors to keep the truck in Oshawa," Chris Buckley, a plant representative, told the Canadian Broadcasting Corporation (CBC).
    "General Motors is going to produce our truck in Mexico and the United States. That's disgusting and I'm absolutely feeling betrayed."

    SOURCE: Agencies


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