Trump urges GM to close plants in China instead of Ohio

28 November, 2018, 00:22 | Author: Kathy Ellis
  • GM to Close 8 Plants, Lay Off Close to 15,000 Workers

General Motors on Monday announced it will cut up to 14,000 workers in North America and put seven plants up for possible closure worldwide as it abandons many of its auto models and restructures to focus more on autonomous and electric vehicles.

The affected plants include three vehicle factories-one in Lordstown, Ohio, one in Detroit, Mich. and the other in Oshawa, Ontario-and two transmission factories in Baltimore and Warren, Mich.

The company also said it would close three plants outside North America by the end of next year. Other plants closing include the Oshawa Assembly Plant in Oshawa, Ontario, the Lordstown Assembly in Warren, Ohio, and the Baltimore Operations in White Marsh, Maryland.

On Monday, GM officials announced their decision to lay off 14,000 factory and white-collar workers in North America.

"We're going to fill up those factories or rip them down and build new ones", Mr. Trump told a cheering audience.

At the factories, around 3,300 blue-collar workers could lose jobs in Canada and another 2,600 in the US, but some USA workers could transfer to truck or SUV factories that are increasing production.

While Hill and Green said the company may need to be incentivized with more tax breaks, Ryan said he was angry that GM benefited from the taxpayer funded bailout in 2008 that cost the federal government billions, the president's tax-break plan and local abatements, yet "screwed" workers in Lordstown and the other plants. Meanwhile, the decision to idle the plants is part of a strategic shift away from cars and toward trucks and SUV's ― Americans continue to buy big as gas prices remain relatively low ― as well as electric and self-driving vehicles.

"I am deeply frustrated with General Motors' decision", Portman said in a statement.

Autonomous vehicles remain in testing and face a litany of safety and regulatory hurdles, while full battery-electric vehicles represent roughly 1 percent of USA sales this year, according to IHS Markit. The stock is still down about 7 percent this year.

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Factories in OH and MI will halt production and jobs will be cut across all of North America, CEO Mary Barra said.

Through the workforce downsizing and plant closures, GM expects to reduce total annual costs by $6 billion by the end of 2020.

Auto sales have slowed in both China and the United States, two of GM's most important markets. "For decades, workers in the Mahoning Valley have made a commitment to GM, and today GM let Northeast Ohio down".

Many of those who will lose jobs are now working on conventional cars with internal combustion engines.

Its North American salaried workforce, including engineers and executives, will shrink by 15 percent, or about 8,000 jobs.

In a press release, GM said it will cut 15 percent of its salaried workers and new products will be brought to fewer plants next year. Trump said he told the company that the US has done a lot for GM and that if its cars aren't selling, the company needs to produce ones that will.

However, many factors are at play for GM.

Barra on Monday said the company is not opposed to seeking partnerships in passenger cars but had nothing to announce at this time. The company offered buyouts to 18,000 white-collar workers in October, but hasn't said how many accepted.

"They better damn well open a new plant there very quickly", he told the WSJ afterward, claiming that he told GM CEO Mary Barra in a phone call last night "you're playing around with the wrong person".

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