Published: Wed, November 28, 2018
Finance | By Jaime Brady

General Motors to slash jobs and production, drawing Trumps ire

General Motors to slash jobs and production, drawing Trumps ire

President Donald Trump has asked the General Motors to stop manufacturing cars in China, according to a media report, after the American automobile company announced its plans to cut around 14,800 jobs in the USA and Canada. "We are determined to do everything we can to convince General Motors to make Lordstown part of the future of auto manufacturing", he said. He continued, "We are now looking at cutting all @GM subsidies", including for electric cars.

US President Donald Trump has escalated his attack on General Motors (GM) after the carmaker's announcement of major job cuts.

The restructuring reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks.

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

The company said the cuts - 2,500 jobs in Oshawa, GM's Canadian heartland, as well as 3,300 production workers in the US and 8,000 salaried staff - are part of a dramatic course correction aimed at better positioning GM for the dominance of electrified, interconnected and automated automobiles. In October, nearly 65 percent of new vehicles sold in the US were trucks or SUVs.

Ohio's incoming governor and lieutenent governor, Mike DeWine and Jon Husted, said they would visit GM in person to make the case for saving the Lordstown plant. The Baltimore Operations plant will stop building transmissions, and likewise the Warren Transmission Operations site in MI.

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In a news conference earlier Tuesday, White House economic adviser Larry Kudlow said he met with Barra and the two had a "lengthy conversation" about the layoffs. GM is ending production of six vehicles, including the Volt, as it cuts more than 6,500 factory jobs. The automaker says the decision to reduce American production has to do with reduced demand for cars like the Chevrolet Cruze, which is built at the OH plant, and an overall strategic shift towards more popular crossover and SUV models.

She said: 'This industry is changing very rapidly, when you look at propulsion, autonomous driving and ride sharing. He did not specify how much GM receives in federal subsidies. Ford, whose third-quarter sales in China dropped 43 percent from a year ago, estimated that the tariffs would cost the company at least $1 billion in lost profits by the end of 2019. GM may hit that limit by the end of this year, even without Mr. Trump's threats to cut subsidies, although the company is also the recipient of other federal grants.

In total, GM's North American salaried workforce will shrink by 15 percent (8,000 jobs).

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.

Like Trump, Sen. Chris Van Hollen said in a statement that he was "deeply disappointed and frustrated" with the company.

GM closed a plant in Indonesia in 2015 and fired 500 workers after reportedly losing about US$200 million on the Chevrolet Spin. GM has said sagging demand for small cars largely prompted the cuts.

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