Trump threatens to cut subsidies for GM after layoff, plant closure announcement

General Motors To Close Ohio Plant, Thousands Affected

"In contrast to times past, General Motors under CEO Mary Barra is trying to get ahead of a potential crisis by making cuts now", Michelle Krebs of Autotrader said in a client note. "This is a cyclical, highly competitive, slow-growing business".

Barra, GM lifer, is dealing with two challenges.

While industry-wide passenger vehicle sales were down 13.2 percent through the first nine months of the year, pick-up truck and SUV sales rose 8.3 percent.

The changes announced Monday will not impact GM's new trucks and SUVs, which are Barra said are "doing very well".

She is taking much of the savings and plowing it into new technologies, such as electric and autonomous vehicles, betting GM's future growth will come from selling rides in self-driving electric models, not building cars and trucks for emerging markets and finding new buyers in the U.S. The longest such run in the past was a two-year stretch that ended in 2001.

More than 16 months ago, the UAW confirmed that it was discussing with GM the potential threat to plants and jobs from slumping US sedan sales. That's how GM can meet demand for trucks and SUVs while raising the possibility of closing auto factories. Now, GM says the Cruze will no longer be sold in the USA and production will end March 1. Both of those pursuits are going to require tens of billions of dollars in spending over the next decade to keep up with rivals including Volkswagen AG.

"We warned early on that these measures, such as protectionism in aluminium and steel, are rapidly spreading to other industries", Kooths told DW.

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The US economy remains strong overall, with the unemployment rate at a near 50-year low of 3.7 per cent.

Barra met with White House economic adviser Larry Kudlow after the announcement.

Speaking to reporters Monday, Trump said that he was "not happy" about the decision. In a press statement, the company said it will close the Detroit-Hamtramck Assembly Plant in Detroit and Warren Transmission Operations in Warren.

"I spoke with her (Ms Barra) when I heard they were closing and I said, "You know, this country done a lot for General Motors", he said. GM emerged from bankruptcy in 2009.

United Automobile Workers vice-president Terry Ditties echoed Mr Trump's sentiment, saying: "This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce". He said it was "clear" that GM "doesn't respect" the Lordstown workers, and slammed the auto company for not doing enough to reinvest the savings from its tax cuts. He said his wife also works at the GM facility and the pair have an 11-month-old at home. "They want to make sure they are out front". "That adds up to more than 8,000 jobs, after almost 18,000 salaried employees were offered buyout packages last week". The charges will take place in the fourth quarter of 2018 and the first quarter of next year. LaCrosse and Volt production will end March 1, while CT6 and Impala production would stop June 1.

When GM ended production of the Chevy Cobalt at Lordstown, it had already announced that the plant would be retooled for the Cruze.

Bobbi Marsh, who has worked assembling the Chevrolet Cruze compact vehicle at the OH plant since 2008, said she can't understand why the factory might close given the strong economy.

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