Another round of layoffs from Michigan-based automakers came Friday when General Motors announced cuts to its salaried workforce in Warren.

The automaker said it will trim 1,000 global jobs, with the bulk to come from the GM Global Tech Center in Michigan’s third largest city. Some of the jobs also will be hourly, the automaker said, but it did not provide further details.

The move comes in a year filled with industry strategy shifts as US automakers contend with slowly growing electric vehicle sales, consumer demand that still lags the pre-pandemic years by about 1 million vehicles and expected federal policy shifts.

Layoffs are “not a tremendous surprise, given the global, intense competition that a company like General Motors is in right now,” Glenn Stevens, executive director of statewide auto advocacy group MICHAuto, told Bridge Michigan.

Chinese automakers now produce enough vehicles to fulfill about half of the world’s new-car demand, Stevens said, and their products are developed very quickly.

“Any company in this market, this global market, has to have speed,” Stevens said. “You have to be as efficient and streamlined, and have the right people in the right positions, to execute like that. And that is what you’re hearing from General Motors today.”

The layoffs at GM were made “in order to win this competitive market,” spokesperson Kevin Kelly said in a statement sent to Bridge.

To do that, Kelly continued, “we need to optimize for speed and excellence. This includes operating with efficiency, ensuring we have the right team structure, and focusing on our top priorities as a business.”

The layoffs come after multiple delays in vehicle launches, factory slowdowns and staff cutbacks across the Detroit Three. Among them:

• GM’s layoffs on Friday follow a 1,000-employee layoff round in August, when 600 workers at the tech center lost jobs.
• Ford recently put 750 workers on temporary layoff when it halted F-150 Lightning production in Dearborn, saying it needed to stem high inventories and losses. Production is expected to resume in January. Ford had already cut production of the truck by 50% in early 2024, and made other adjustments across its portfolio.
• Stellantis, which operates its North American headquarters in Auburn Hills, offered buyouts to salaried workers in the summer, then laid off 1,100 workers in Warren in October amid declining sales. Another 400 followed this month at a parts facility in Detroit, and an additional 1,100 workers have been idled at its Jeep factory just south of Michigan in Toledo.

“This is an unmistakable sign the auto industry is slowing,” said Patrick Anderson, CEO of Anderson Economic Group in East Lansing. “And that consumers are expressing some reluctance about buying the higher-priced cars, notably electric cars.

“Manufacturers are cutting back on their costs in anticipation of a further slowdown,” Anderson said, “or even a recession.”

GM has said its EVs are close to profitable, but the automaker continues to lose money on every electrified model it sells. As a result, it has slowed its product pipeline, including keeping the Orion Assembly plant idled.

Similar situations are taking place across the global industry.

A Bridge Michigan investigation in spring showed that projects tied to all of the state’s major EV subsidies — worth a combined $1 billion — had slowed or stalled.

EVs have sold at a rate representing about 7% of the US market for much of 2024, but Cox Automotive reports that rate reached 9% in September.

While average EV prices remain at about $56,000 for the year — about $8,000 more than the average gas-fueled auto — an estimated 80% of the market is now leasing instead of buying. Advertised deals show plummeting pricing, including offers for the Ford Lightning at $209 per month.

Anderson said that even with the slight sales uptick — which is far from the projected pace — “consumer reluctance is now impossible to ignore.”

Automakers, he said, “have to start reducing expenses, and unfortunately, they’ve decided to do so with engineering and other staff that have been working on all kinds of vehicles, and not just electric vehicles.”

Anderson said the salaried layoffs are a reminder of the depth of the auto industry. Auto suppliers also are starting to make staff cuts in reaction to Detroit Three slowdowns, and the business losses can reach into professional services and dealerships, among related businesses.

GM’s layoffs also come a day after a report from Reuters that President Donald Trump, preparing for a second term that starts in January, is expected to end the $7,500 consumer tax credit for electric-vehicle purchases.

If that happens, Anderson said, consumers will lose the biggest financial incentive to choose an EV.

“The regulatory environment will keep getting tougher,” CEO Mary Barra wrote to shareholders on Oct. 22, hinting at future cost-cutting. “That’s why we are focused on optimizing our (internal combustible engine vehicle) margins and working to make our EVs profitable … as quickly as possible.”

Meanwhile, the Tech Center in Warren remains home to GM’s highest concentration of software and related-services employees. In fact, even with Friday’s layoffs, the company still lists more than five dozen open jobs there.

General Motors [NYSE: GM] is Michigan’s second-most valuable publicly traded company, with a market capitalization of $63.3 billion. The automaker has traded at a year-long high since Oct. 22, peaking at just over $59 per share on Thursday.

The company employs about 163,000 workers worldwide, with about 25,000 in southeast Michigan. GM won’t say how many of those are salaried or hourly.

GM said in October that its profitability improved in the third quarter with a 10.5% increase in year-over-year sales, due in part to cost-cutting.

GM is making decisions for the long term health of its business, Stevens said, which also eventually will benefit Michigan.

“They’re one of our biggest, most important corporate citizens,” Stevens told Bridge, “and their health … is really important to us. No one likes to see any layoffs. But what we do want is a healthy and vibrant GM for the future.”

This article is being republished through a syndication agreement with Bridge Michigan. Bridge Michigan is Michigan’s largest nonprofit news service and one of the nation’s leading and largest nonprofit civic news providers. Their coverage is nonpartisan, fact-based, and data-driven. Find them online at https://www.bridgemi.com/.