General Motors to slash jobs and production, drawing Trump’s ire
DETROIT: General Motors said on Monday it will cut production of slow-selling models and slash its North American workforce because of a declining market for traditional gas-powered sedans, shifting more investment to electric and autonomous vehicles.
GM’s actions add up to the biggest restructuring for the US No 1 carmaker since its bankruptcy a decade ago, and mark a turning point for the North American auto industry. US automakers have enjoyed nearly a decade of prosperity since the 2008-2009 financial crisis and the government bailouts of GM and the former Chrysler Corp.
GM’s announcement immediately drew criticism from US President Donald Trump, highlighting the political risks facing GM.
He demanded the automaker find a new vehicle to build in Ohio and added that he had told GM Chief Executive Mary Barra he was unhappy with her decision to cut production at an Ohio factory. Ohio will be a key state in the 2020 presidential campaign.
“I have no doubt that in the not too distant future, they’ll put something else. They better put something else in,” Trump, who has pushed for more manufacturing jobs throughout his almost two years in office, said.
GM did not immediately comment on Trump’s remarks, but the company noted it has other facilities in Ohio including a transmission plant in Toledo and metal center in Parma.
GM and its rivals are facing rising bills for technological transformation, increased risks from US trade policy and investors reluctant to fund their traditional product strategies.
Barra on Monday portrayed the decision to put five North American factories on notice for potential closure and cut nearly 15,000 jobs as necessary to keep the company strong as it plows money into new technology and new businesses such as robo-taxi services.
“This industry is changing very rapidly,” Barra said during a press briefing. “These are things we are doing to strengthen our core business.”
GM shares rose as much as 7.8 per cent following the announcement, and were nearly 6 per cent higher at $37.97 in mid-afternoon trading. Shares of Detroit rivals Ford Motor and Fiat Chrysler Automobiles NV also rose, outpacing the broader market.