Angry over cutbacks, Trump threatens to end subsidies to GM

General Motors To Close Ohio Plant, Thousands Affected

General Motors To Close Ohio Plant, Thousands Affected

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 US president is so disappointed with the latest job and production cuts at General Motors.

US President Donald Trump has escalated his attack on General Motors (GM) a day after the carmaker announced major job cuts. Another two will close outside North America.

In a statement, Detroit Mayor Mike Duggan described the news as "troubling" and said that the city's economic development team and the UAW union are "working together to come up with a solution that works for GM and the employees".

GM said it would phase out certain models of slower-selling cars, halting production at four factories in the United States and one in Canada.

GM announced in February that it planned to close one plant and threatened to leave South Korea entirely if it didn't get concessions from workers to stem losses. In October, nearly 65 percent of new vehicles sold in the USA were trucks or SUVs.

When news emerged late Sunday that the company was planning to shut down its flagship Canadian plant in Oshawa, Ont., putting more than 2,500 people out of work, social media set its sights on Trump's "America First" strategy for bringing manufacturing jobs back to USA soil. The Baltimore Operations plant will stop building transmissions, and likewise the Warren Transmission Operations site in MI.

GM CEO Mary Barra said the industry is changing rapidly and moving toward electric propulsion, autonomous vehicles and ride-sharing, and GM must adjust.

The plant in Lordstown, Ohio, that makes the Chevrolet Cruze compact vehicle is on the possible closure list. 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.

In GM's third-quarter earnings call with investors, CEO Barra said the decline in sales was not a direct result of tariffs.

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In the Indian market, GM used to retail Chevrolet cars but had halted domestic sales in 2017.

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

"There's disappointment that it seems GM would rather build its electric cars in China than the U.S". That figure was about 50 percent cars just five years ago.

More than 16 months ago, the UAW confirmed that it was discussing with GM the potential threat to plants and jobs from slumping USA sedan sales.

President Donald Trump, who has made bringing back auto jobs a big part of his appeal to OH and other Great Lakes states that are crucial to his re-election, said his administration and lawmakers are exerting "a lot of pressure" on GM.

That said, GM still has skin in the game.

All these actions are expected to increase GM's annual adjusted automotive free cash flow by $6 billion on a run-rate basis by year-end 2020, according to the company.

"GM workers have been part of the heart and soul of Oshawa for generations - and we'll do everything we can to help the families affected by this news get back on their feet", he said.

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