DETROIT—General Motors said it will significantly cut its salaried work force and could close up to five plants in North America, including three assembly plants, as part of an overhaul of its operations in 2019.
The auto maker said Lordstown Assembly in Ohio, Detroit-Hamtramck Assembly in Michigan and Oshawa Assembly in Canada will not be allocated any products beginning in 2019. Propulsion plants in Maryland and Michigan also will not be given any product.
All of the products currently being assembled at those three plants are expected to stop being produced by the end of 2019.
GM expects the announced actions to annually contribute to $6 billion in cash savings by 2020, including $4.5 billion in cost reductions and $1.5 billion in lower capital expenditures. GM shares rose 2.2 percent to $36.72 in early trading.
Not allocating product doesn't mean the plants will close, but it puts their future and the jobs of roughly 6,300 hourly and salaried factory employees—3,300 in the U.S. and 3,000 in Canada—at risk heading into contract negotiations with the UAW in 2019 and Canadian union Unifor in 2020.
GM also announced it will close two unidentified assembly plants outside of North America by the end of next year and restructure its salaried workforce.
The salaried workforce restructuring includes cutting 15 percent of its 54,000 salaried employees in North America, including slashing global executives by 25 percent.
It was expected that GM, which announced the overhaul Nov. 26, needed to address underutilization of its plants. The announcement comes ahead of negotiations with the UAW in 2019 and Unifor in 2020 is uncommon.
GM represents 1 million of the 3.2 million units of underutilized capacity in the U.S. through October, according to the Center for Automotive Research.
The manufacturing overhaul follows recent cost-cutting measures by GM such as offering buyouts to 18,000 salaried employees and exiting or restructuring unprofitable markets such as Europe and South Korea.
Oshawa currently has two assembly lines. The flex line produces the low-volume Cadillac XTS and Chevrolet Impala while the truck line produces the light- and heavy-duty Chevrolet Silverado and GMC Sierra pickups. It employs 1,542 employees, including 1,348 hourly union workers.
Detroit-Hamtramck currently builds the Chevrolet Volt, Chevrolet Impala, Buick LaCrosse, Cadillac CT6. U.S. sales of the Impala were down 13 percent through September.
Lordstown, which has dropped from three shifts to one in recent years, exclusively produces the Chevrolet Cruze. Sales of the compact car were down 27 percent through September, GM said.