GM recently announced a restructuring plan that includes laying off about 14,000 employees and halting production at five of its North American auto plants.
The announcement got a lot of attention, most of it rightly focused on the impact on workers and what it might mean for the broader economy.
But since we track and forecast trends, we focused on how GM's moves are being driven by a mix of businesses and technological trends.
These trends, which are in black below, include:
The need for increased business agility and flexibility: GM makes it clear in their press release on the restructuring that a key goal is to increase their agility and flexibility. They especially want to be able to more quickly adjust to industry changes and shifting consumer demand. Key quote:
“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” said GM Chairman and CEO Mary Barra. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
We long covered the need for greater business flexibility and agility and consider it one of the new economy megatrends.
This also is another example of a company restructuring despite strong financial results.
With business conditions changing rapidly and the growing intensity of global competition, firms are no longer waiting until they get into financial trouble before making major changes. They do it in both good and bad times.
One impact of this is decreased job security, another trend we track. It used to be if the company was doing well, your job was safe. This is no longer the case.
The shift from car ownership to mobility services. Many of the articles on GM's restructuring cover this topic. Bloomberg's Peak Auto Claims Another Victim and Wired's GM's Job Cuts are Another Sign of a Future With Fewer Cars both do a nice job on this.
The key points these articles make is the rise of ride, scooter and bike sharing coupled with increases in urban living, ecommerce and working from home are combining to reduce the demand for cars.
The chart below, from the Bloomberg article, nicely illustrates the long-term trend away from car ownership in the U.S.
This trend is expected to accelerate over the next decade as autonomous cars become practical.
GM is investing in this area even as it cuts elsewhere. Their Cruise autonomous car group has grown from 40 to over 1,000 employees over the past few years with more hiring and investments planned for next few years.
The shift to electric cars. GM, along with most everyone else, see electric cars as the future. The company said last fall that it would launch 20 new electric cars by 2023 and is investing heavily to make this happen.
The growing need for highly skilled talent - and especially technical talent - means companies have to constantly upgrade and change their employee skill sets. While training existing employees can help, the reality is this unfortunately means letting some people go to make room for new people with different skills.
GM's press release sums this up when it says "The company is transforming its global workforce to ensure it has the right skill sets for today and the future ..."
For workers this means the need for continual learning and improving skill sets.
We rarely see so many trends illustrated in a single corporate action. It's an interesting case study.
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