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

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The move is likely to lead to the loss of more than 14,000 jobs in North America, including over 6,100 shift workers at the plants. Numerous USA workers impacted by these actions will have the opportunity to shift to other GM plants where we will need more employees to support growth in trucks, crossovers and SUVs.

As well as Detroit-Hamtramck, assembly plants in Oshawa, Ontario and Warren, Ohio will close.

"Today our generation is facing a new Black Monday in the Mahoning Valley", Congressman Ryan said, "GM's announcement is devastating for the men and women working at Lordstown and everyone here in the Mahoning Valley". In October, nearly 65 percent of new vehicles sold in the U.S. were trucks or SUVs. The company, which came out of bankruptcy only a few short years ago, has to take steps to remain "lean" and "agile", according to its CEO.

GM is shedding cars largely because it doesn't make money on them, Citi analyst Itay Michaeli wrote in a note to investors.

The General Motors assembly plant in Oshawa Ontario Canada
The General Motors assembly plant in Oshawa Ontario Canada

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.

Toyota also has discussed cutting costs, even though it is building a new assembly plant in Alabama.

Barra on Monday portrayed the decision to put five North American factories on notice for potential closure and cut almost 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.

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.


The plan to lop 15 percent of salaried workers follows a round of buyouts that GM offered to about a quarter of its longer-tenured workforce at the end of October.

Barra explained to the Journal that the company made the decision to act now, despite a healthy economy and GM's good earnings, to help the company maintain profits through an expected downturn in the American auto market and free up money to invest in electric and self-driving vehicles.

The company has been hit hard by steel tariffs after President Trump vowed to take on China.

GM's global sales trends show why this would be a lousy idea.


Some UAW workers could land jobs at other GM factories, but many will face uncertain futures unless GM reverses course.

She said GM is still hiring people with expertise in software and electric and autonomous vehicles. However, this subsidy goes away once an auto maker reaches 200,000 electric cars sold.

GM's chief executive officer is far from alone in wanting to build vehicles close to where they're sold to reduce logistical costs. GM sold almost 2.7 million vehicles in China through September, almost all of them built in China for the market. I believe they'll be opening up something else. LaCrosse and Volt production will end March 1, while CT6 and Impala production would stop June 1.


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