Self-Driving Cars Are the Future. Jobs in Auto Manufacturing Are Not.
General Motors announced mass layoffs on Monday. The automaker plans to cut about $6 billion in spending and fire 14,700 employees, including more than 6,000 factory workers and 8,000 salaried workers. It will also idle five North American factories. Don’t take it as a sign of business trouble, though: GM reported $2.5 billion in net income in the third quarter of 2018, and has done very well during the past decade of economic growth. Rather, the layoffs are a long-term strategic decision — one that gives us some insight into the future of car manufacturing in the U.S.
There are two strategic imperatives behind the layoffs. The first is GM’s need to get out of the business of making increasingly unpopular sedans in favor of selling trucks, SUVs, and crossovers, in following with general consumer preferences. The company is halting production on the Chevrolet Cruze and Volt, the Buick LaCrosse, and the Cadillac XTS and Cadillac CT6.
The second, says GM CEO Mary Barra, is making “GM lean and agile as we aim to lead in autonomous and […] electric vehicles.” That’s great news for people working at GM Cruise, the company acquired by GM for $1 billion in 2016 and now valued at $11 billion. GM Cruise has quickly become a true contender for winning the race to build a commercial business around automated vehicles.
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