General Motors Layoffs: Shifting Focus to Electric Vehicles with China Job Cuts

China's Motor vehicle industry is experiencing a fluctuation companies in the Industry are laying off thousands of worker for a joint venture to shift their focus to EVs. General Motors Co. is going to meet with local partner SAIC to plan a major infrastructural and structural renovation. China's SAIC Motor 600104.SS aims to cut thousands of jobs this year for the joint venture with General Motors and Volkswagen.

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It is very unlikely for Stae-owned companies to do mass layoffs. The layoffs represent a major shift in GM's strategy which earned them billions in dollars in 2018. The automaker is trying to retain as many foreign brands as it can. In the world's largest car market, they can't afford to struggle against local competitors. The collective problem of the market is massive overcapacity.

The Reset will focus on the shift Upscaling of models and importing premium vehicles. Reduction and reducing factory capacity ares till under coideration. GM will continue to make affordable EVs in the joint venture. GM is working with a local partner to renovate the Industry. A 30-year contract with state-owned SAIC is set to expire in 2027 and GM wants to return the business to sustained profitability before then.

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GM has lost $104 million in China in the recent quarter making it a total loss of $210 million this year. GM has been preparing its comeback for months now. Chief Financial Officer Paul Jacobs said “We’ve got to remain competitive and that means that we’ve got to take a look at the business with our partner to ensure that we can restore it to profitability and that we can restore it to self-sustaining cash flow going forward,” Jacobson said at that event in New York. “China can be a good asset for us and remains a good asset for us.”

GM is the longest-running foreign motor brand in China and only the second one to get permission to do so. Its sales peaked at 4 Million in 2017 which was cut down to 2.1 million last year.

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