More than 3,400 General Motors Co. workers who build electric vehicles and batteries will be laid off as the company rapidly adjusts to new policy under President Donald Trump and sluggish interest among U.S. buyers.
Employees at the automaker’s Detroit-area all-electric assembly plant — dubbed Factory Zero — will be hit the hardest, with 1,200 jobs cut as the company downsizes to a single shift in response to the slowing U.S. electric vehicle market.
The company will also cut 550 jobs at its joint-venture Ultium Cells battery cell plant in northeast Ohio, with another 850 slated for temporary layoff. The Ultium Cells plant in Tennessee will temporarily lay off 700 workers. Nearly 120 others at plants that make other EV parts face temporary layoffs, too.
GM’s layoffs at the Factory Zero Detroit-Hamtramck Assembly Center and multiple battery plants reflect the consequences of a rapid pullback in EV production as automakers adjust to abrupt reversals in federal policy and a U.S. EV market no longer bolstered by $7,500 tax credits for buyers and lessees.
Automakers also expect to soon be free of expensive government fines for greenhouse gas emissions that pushed EV manufacturing ahead of market demand. Both policy changes were backed by Trump and a Republican-controlled Congress.
“For now, under the changing regulatory environment, we expect EV demand growth to slow pretty significantly from what it was going to be,” GM Chief Financial Officer Paul Jacobson told investors last week. “And so we need to make sure that we right-size the capacity footprint to be able to not have to absorb a lot of those fixed costs. So while it’s unfortunate, it is a quick adjustment to the reality around us that we’re facing.”
The U.S. EV market is now in a transition period, said Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions LLC.
“Without the federal incentives, the playing field has changed and manufacturers are going to need to decide whether or not they want to build certain EVs,” Fiorani said. “The market is going to continue to be there for electric vehicles, but for a long time we’ve had too many offerings and not enough buyers.”
Fiorani said to “absolutely” expect more layoffs through the EV sector: “We’ve already seen it at Rivian, we’re seeing it now at General Motors (and) we’re going to see it at Ford and others going forward.”
GM’s other recent EV pullbacks include the cancellation of BrightDrop electric delivery vans, new plans to build the next-generation gas-engine Cadillac CT5 midsize sedan at a Lansing plant instead of planned EVs, and a complete reversal of plans to make EV drive units at a transmission plant in Toledo.
GM last week announced a $1.6 billion charge on EV investments that are no longer expected to rake in profits as the company once planned.
Despite the hit to EVs, the company also last week upped its expected yearly net profits to between $12 billion and $13 billion, up from a previous projection of $10 billion to $12.5 billion. The automaker’s stock closed up nearly 15% in response. Its shares closed down 1% Wednesday.
“Last week, GM raised its expected annual profits to $13 billion dollars,” United Auto Workers President Shawn Fain said in a statement. “This week, they announce layoffs. So let’s be clear: GM is a profitable company, our members remain ready to work, and the UAW will continue to fight for more investment in both ICE and EV production at GM and beyond.”
EV sales have plummeted since the federal tax credit ended at the end of September, a deadline that had caused a last-minute surge in sales for GM and other rivals.
From the last full sales week of September to the first full week of October, EV sales at dealerships fell 74%, according to Cloud Theory, which tracks car inventory on dealer websites across the country. And while some automakers were able to sell down much of their electric inventories before the deadline, GM still had about 39,000 EVs on dealer lots as of midway through this month, the firm said.
GM on Wednesday said Factory Zero, which went offline this week, will remain shut down until Nov. 24, when it will run two shifts until the holiday break. It will only operate one shift when it reopens Jan. 5 after the holidays.
About 2,000 employees will stay on at Factory Zero, spokesperson Kevin Kelly said. Cuts will be based on seniority.
The all-electric plant has repeatedly cut shifts and slowed production this year, including axing a shift each for the GMC Hummer EV and Cadillac Escalade IQ, amid sluggish EV sales.
“Unfortunately, right now, we don’t have the support that we’re looking for,” said UAW Local 22 President James Cotton, whose union chapter represents workers at Factory Zero. “And hopefully down the line that will pick back up.”
Cotton said it was “too premature at this moment” to say how many of the affected workers would have the opportunity to relocate and find work at other GM facilities.
Fain, in a statement, said the UAW is “actively working with and meeting with the company to ensure that our UAW members have a place to land, and are back to work as soon as possible.”
Ultium Cells plants in Spring Hill, Tennessee, and Warren, Ohio, will pause operations starting Jan. 5 and continuing through at least May, Kelly said.
“During the temporary pause, Ultium Cells plans to make upgrades to both facilities to provide greater flexibility,” according to a GM statement. “Ultium Cells will continue to evaluate and adapt production plans based on evolving market needs.”
Kelly said more layoffs are coming at two other sites. GM’s Pontiac Metal Center, a Metro Detroit stamping plant that supplies parts for Factory Zero, will temporarily lay off 45 workers and New York’s Rochester Operations, which makes electric vehicle battery cooling lines supplied to Factory Zero, will temporarily idle 74 employees. Both actions will take effect Nov. 17.
GM has been paring down its workforce outside of EV-related jobs. The company on Monday laid off about 325 workers while confirming plans to close its Georgia IT Innovation Center by the end of the year. Last week, the automaker laid off more than 200 salaried staff, mostly at its Technical Center in Warren. Earlier this month, an unspecified number of workers on GM’s now-defunct hydrogen fuel cell program in Pontiac also were laid off.
GM is not alone as it scales back plans for EV and battery production.
Ford Motor Co. has delayed production plans at major battery plants it has a stake in, while a Stellantis NV partnership isn’t moving forward with major parts of its originally planned battery factory footprint. Numerous battery projects have been scrapped, delayed or mothballed.
Automakers are in many cases rethinking their entire game plan for EVs under Trump, pivoting more to hybrids and big-engine trucks, pausing EV assembly lines, and in some instances ― including with GM ― altogether stripping EV-related production equipment out of factories.
Washington Correspondent Grant Schwab and Staff Writer Luke Ramseth contributed to this report.
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