GM Halts Renovations of Michigan Facilities

General Motors Co. has stopped work on renovations to its Warren, Mich., technical center and propulsion headquarters in Pontiac, Mich.

In a letter to employees this week, CEO Mary Barra says GM’s structural costs are not aligned with “market realities nor the transformational priorities ahead.” Barra declares that GM must take significant actions now to cut costs while the company and economy are strong.

Automotive News was the first to report the news. The letter also details plans to offer buyouts to about 18,000 white-collar workers, which GM confirmed on Wednesday.

Last year, GM said it was in the final stages of completing a $1 billion investment in the massive Warren complex. One of the postponed projects is a $180 million expansion of GM’s iconic design center, which was to be doubled in size. In Pontiac, GM planned to modernize an aging facility and create open work spaces.

Citing such factors as trade and global economic conditions outside of GM’s control, Bara said cost-cutting is necessary to protect the company against an unpredictable future. Improving cash flow also will give GM more flexibility to invest in new technologies, such as autonomous and electrified vehicles.

Barra notes GM’s strong financial results in the third quarter (including a net profit of $2.5 billion), which were announced this week. But she stresses that profitability is only part of the company’s transformation, and she urges all employees to remain focused on improving GM’s overall financial strength.

GM says it’s on track to meet an initiative set in 2015 to cut costs by $6.5 billion by the end of this year.