Tuesday, 18 December, 2018

GM Cuts Jobs and Production, Canceling Some Car Models

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Jodi Jackson | 28 November, 2018, 02:43

General Motors rallied as much as 8% Monday after announcing plans to stop producing vehicles at three factories in North America and to cut its salaried employees by 15% next year. He says he told the company that the USA has done a lot for GM and that if its cars aren't selling, the company needs to produce ones that will.

The plant in Lordstown, Ohio, which makes the Chevrolet Cruze compact auto also is on the list, and Barra said the Cruze would no longer be sold in the U.S. Production would stop March 1.

That didn't seem to placate Trump, who famously promised OH supporters their jobs were "all coming back" during a 2017 rally not far from GM's Lordstown facility, where production will grind to a halt in the spring.

GM is cutting more than 6,300 hourly and salaried workers at its plants and 15 percent of the salaried workers in North America for a total of more than 14,000.

While talking to reporters, Barra said GM is making the cuts to "get in front of it while the company is strong and while the economy is strong".

GM sold almost 2.7 million vehicles in China through September, almost all of them built in China for the market. It was about 50 percent cars just five years ago.

Kudlow said the Trump administration will be looking into subsidies for "electric cars and others".

On Tuesday, Trump followed up and reminded the company of its debt to the American people and threatened to slash all subsidies. In October, nearly 65 percent of new vehicles sold in the US were trucks or SUVs.

U.S. Senator Rob Portman, a Republican from OH, said he's "deeply frustrated" with GM's decision to shut down a plant in Lordstown and is pressing Barra to come up with an alternative product for the factory.

GM shares were trading around $37.78 as of 3:35 ET on Monday.

"These actions will increase the long-term profit and cash generation potential of the company and improve resilience through the cycle", Barra said. "After years and years of sending our jobs and wealth to other countries, we are finally standing up for our workers and for our companies".

GM also is ramping up hiring at its GM Cruise autonomous vehicle unit, pushing to overcome technical challenges and make good on a plan to launch a robo-taxi service next year.

General Motors calls this a pre-emptive strike to get leaner before the next economic downturn. He said he voted for Trump two years ago because of the Republican's vow to help American workers. However, the president's policies have contributed to the problem according to GM, who have pointed towards rising costs for suppliers, namely steel tariffs.

While GM did not cite tariffs for the plant closure, Trump's trade crackdown has created problems for the auto industry.

Donald Trump's chief economic adviser is citing America's new free trade pact with Canada and Mexico as one of the reasons why the USA president is so disappointed with the latest job and production cuts at General Motors.

"Everything is up in the air", she said.

In addition to the Oshawa assembly plant, GM has an engine and transmission plant in St. Catharines, Ont. and the CAMI Assembly plant in Ingersoll, Ont. However, this subsidy goes away once an auto maker reaches 200,000 electric cars sold.

Ms Keller added that boosting electric-car output will be important for the Chinese market.

GM builds full-size Chevrolet and GMC pickups in Mexico, and it recently announced that a new Chevrolet Blazer SUV will be built there.

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