General Motors to Cut 1,700 Jobs, Temporarily Lay Off 5,500 Employees

On 29 October, General Motors (GM) declared its intention to reduce the manufacture of batteries and electric vehicles in the United States. In response to a slowdown in demand for battery cars, it plans to lay off 1,200 employees at its EV facility in Detroit and 550 at a battery plant in Ohio, according to Reuters.

The automaker announced in January that it will put a roughly six-month halt to battery cell production at two joint-venture battery operations in the United States, located in Ohio and Tennessee. In the meanwhile, GM plans to temporarily fire 5,500 workers from three sites.

At its Factory Zero facility in Detroit, which produces the electric Chevrolet Silverado, GMC Sierra, and Hummer EVs, 3,400 employees have been placed on leave. When the mill reopens on a single shift in January, the business said Wednesday it will assess the necessary output level and rehire about 2,200 of those workers. According to Bloomberg, the remaining 1,200 will be placed on indefinite vacation.

Reasons Behind GM Layoffs

According to General Motors, the production and employment reductions were brought on by a changing regulatory landscape and a slower short-term uptake of EVs. According to the news report, it urged the White House and Congress to relax emissions regulations last month. As the $7,500 federal tax credit for EV consumers expires, US automakers anticipate a sharp drop in consumer demand; therefore, they are drastically cutting back on their EV plans.

According to the research, experts predict that after EV sales surpassed 10% of all US auto sales this summer, they may decline by 50% in the months ahead. Plans for future electric models have been put on hold by Nissan, Stellantis, a manufacturer of Jeep, and other automakers. Citing the sluggish growth of the commercial EV van sector, GM declared earlier in October that it was discontinuing the manufacture of its BrightDrop electric van.

GM Reducing its EV Manufacturing

GM has further reduced EV manufacturing this year and lowered its forecast for EV sales. Shawn Fain, president of the United Auto Workers Union, attacked GM for the job losses, pointing out that the firm this month raised its projected yearly profits to $13 billion. About 500 white-collar jobs were eliminated in the past week, according to the company. GM stated in 2021 that it will expand investment and transition to all-EV sales by 2035, but it has since backed down because of declining demand.

Mary Barra, the CEO of General Motors, stated this week that it is obvious that the short-term adoption of EVs would be far lower than anticipated due to the changing regulatory environment and the termination of the federal consumer subsidies. She also hoped that starting in 2026, the carmaker will lower EV losses.