GM is cutting 500 jobs at its Orion, Michigan, plant, although many will take some of the 1,200 new jobs the maker announced last week.
Just before General Motors began its hard-core negotiation with the United Auto Workers last weekend, the automaker announced it was 1,200 new workers by next spring, but due to cuts at its Orion, Michigan, plant, it’ll be more like 700.
The automaker is cutting 500 jobs at the plant due to sluggish sales of two of the five models it builds at the facility, the Detroit News reported. The plant produces the Buick Verano and Chevrolet Sonic subcompacts, which are down 27% and 35% respectively.
The move comes not long after company said it was planning to invest $245 million and add 300 jobs to build the Chevy Bolt EV, plus an unnamed model in the future. The 500 people being let go will have the opportunity to transfer into openings at the Detroit-Hamtramck plant, which is adding the 1,200 jobs.
“We are confident we will be able to make transfer offers to Detroit-Hamtramck or other GM locations for the vast majority of those who are affected by the shift reduction,” the company said in a statement.
The plant is adding a second shift to account for increased production of the second-generation Chevy Volt as well as the upcoming Cadillac CT6. While the displaced workers will have a soft landing, the move may be designed to help the automaker hedge its bets about the two new products at the Orion plant.
(General Motors adds 1,200 jobs at Detroit-Hamtramck plant. For more, Click Here.)
A special agreement with the UAW allows the automaker have as much as 40% of its workforce at the plant be second-tier workers, who are paid significantly lower wages than their tier-one counterparts.
With small cars selling poorly due to lower gas prices and the unknown future of sales of the Bolt and the mystery product, this lowers GM’s overall investment into the facility through the use of the lower-tier employees.
(Click Here for details about the new GM-UAW contract.)
The move comes just as GM and the UAW avoided a strike deadline and agreed to a new four-year contract. Neither side would discuss details before a meeting of the union’s rank-and-file plant leaders, it was expected the tentative contract would adhere closely to the so-called “pattern” agreement at Fiat Chrysler that won worker approval last week.
The contract is expected to closely parallel the union’s agreement with FCA, which included a 53% pay increase for second-tier workers who will reach parity with veteran employees after eight years. The FCA contract also called for first-tier workers to get a 3% pay increase, their first in nine years.
(To see more about UAW’s call for a new vote at VW’s Chattanooga plant, Click Here.)
The union plans to make the details of the GM agreement available immediately after the UAW National GM Council votes on the tentative agreement Wednesday and will have no comment until that time, the UAW said.