General Motors feels heat as president threatens subsidies

Alicia Cross
December 1, 2018

General Motors' announcement that it would close the plants, as well as cut up to 14,000 jobs came as a blow to the Trump administration, which has made rebuilding American manufacturing a policy priority.

But that argument all but evaporated Monday when the company announced that as part of its plan to save US$6 billion by the year 2020, it was also shutting down production at four other USA plants - several of them deep in Rust Belt states that helped elevate Trump to the presidency in 2016.

As news of General Motors' decision to cease production of the Lordstown-built Chevrolet Cruze and idle the Lordstown plant next year continued to ripple throughout the Mahoning Valley, some of the Valley's elected officials took the fight to save the plant to Washington, D.C.

"General Motors is very counter to what other auto, and other, companies are doing", he tweeted.

GM says the money saved from closing plants that build cars people aren't buying will go into new technologies, including electrification and autonomous driving.

White House spokesman Sarah Sanders told reporters on Tuesday that the president is looking at options.

Dias said he would meet with the United Auto Workers on Wednesday and discuss the possibility of "mass actions" in GM plants across the two countries. However, could GM have found a way to avoid this?

Rich Rankin, United Auto Workers Region 2-B director and representative for UAW workers in OH and in, said GM owes the workers for the bailout the company received during the 2008 financial collapse.

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"Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland".

Industry analysts said USA automakers have been hit hard by the steep rise in steel prices brought by higher US duties on imported steel imp; used by Trump.

Separately, US trade representative Robert Lighthizer said he was examining options to raise US tariffs on Chinese vehicles to 40% - the level Beijing charges on US-made cars. As of now, GM shares are back to where they were before Monday's big announcement. But GM is on the cusp of reaching its subsidy limit.

Actually, Trump may have jumped the gun on that as the automaker has only said that it is considering a new plant. Workers also will be added at an SUV factory in Arlington, Texas.

GM said it has invested more than $22 billion in US operations since 2009, when it exited bankruptcy protection.

These moves drew the ire of the president, who said, "We have a lot of pressure on them" to maintain operations in places like Lordstown, Ohio - a state key to his re-election. He also blamed many countries that had been exporting trucks to the USA of taking advantage of Washington for decades.

Senate Democratic Leader Charles Schumer on Tuesday criticized Trump for "overpromising" as a candidate about protecting against plant closures if he was elected.

The restructuring reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. However, for Chinese manufactured cars this figure rises to 25 per cent.

Other reports by Free-Prsite

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