General Motors scales back workforce as it pushes for self-driving cars

General Motors will close five plants and lay off around 8,000 workers in North America, the company has revealed.

The carmaker hopes cutbacks will help it save around $6bn a year as it doubles the resources spent on its electric and self-driving cars, while discontinuing several old models.

The company will say goodbye to around 15 per cent of its North American workforce, including a quarter of its executives.

It plans to close three factories in Ontario, Michigan and Ohio, and two other unidentified plants outside North America, GM’s management told investors.

Shares on the New York Stock Exchange jumped around six per cent on the news.

“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,” chief executive Mary Barra said.

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

Three other plants, in Baltimore, Maryland and Michigan are also under threat of closure as GM plans to phase out the products made there.

Barra said: “These actions will increase the long-term profit and cash generation potential of the company and improve resilience through the cycle.”

The company plans to reduce capital expenditure by around $1.5bn a year to $7bn in 2020, it said.

Barra did not draw a direct link between the cutbacks and President Donald Trump’s steel tariffs, which have cost GM around $1bn, but told Reuters that trade costs are one of the headwinds facing the company.