In November, General Motors stunned the nation by announcing that it will cut 15 percent of its salaried workforce and idle assembly plants in Michigan, Ohio, Maryland and Canada.
The decision will result in the loss of 8,000 white-collar jobs and 6,245 blue-collar jobs: 1,500 in Detroit-Hamtramck; 1,600 in Lordstown, OH; 2,500 in Oshawa, ON; and 645 at transmission plants in Warren, MI, and White Marsh, MD.
The cuts are expected to save the company $6 billion by the end of 2020. “GM is continuing to take proactive steps to improve overall business performance, including the reorganization of its global product development staffs, the realignment of its manufacturing capacity and a reduction of salaried workforce,” the company said in a news release.
Reaction was swift and angry. President Donald Trump said he is “not happy” with GM and that he is putting “a lot of pressure” on the company to reverse course. “This country has done a lot for General Motors,” he pointed out.
For once, he was not exaggerating. A decade ago, the federal government spent $51 billion to keep GM afloat during the Great Recession. (The government ultimately lost $11.5 billion on the deal.) More recently, GM received a benefit of $157 million for the first three quarters of 2018, thanks to tax reform legislation passed in 2017 by Republicans in Congress and signed into law by Trump.
“GM received record tax breaks as a result of the GOP’s tax bill last year, and has eliminated jobs instead of using that tax windfall to invest in American workers,” complained U.S. Sen. Sherrod Brown, D-OH, in a news release.
“GM’s production decisions, in light of employee concessions during the economic downturn and a taxpayer bailout from bankruptcy, puts profits before the working families of this country,” added Terry Dittes, UAW vice president and director of the GM Department, in a news release.
Why the cuts? Like rivals Ford and Fiat Chrysler, GM is cutting back on production of cars in favor of SUVs and trucks. The company will stop producing the Chevrolet Volt and Impala, Cadillac CT6 and Buick LaCrosse, but it will continue to make the Chevrolet Malibu and Bolt, Cadillac CTS and Buick Regal.
“GM wants to stay in front of changing market conditions and customer preferences for its long-term success,” said Mary Barra, GM’s chairman and CEO. “[We’re] transforming this company. This industry is changing very rapidly when you look at propulsion, autonomous driving and ride sharing. We want to be in front of it while the company is strong.”
That may be true, but the company is also shifting production to China and Mexico. GM is building popular products, including the GMC Terrain and Chevrolet Equinox, in Mexico. Through November, it exported 693,782 vehicles from Mexico, mostly to the U.S. and Canada. That has nothing to do with the future of “mobility”—how I hate that new term—and more to do with cheap labor. Shame on you, GM.