GM announces big cuts to workforce and plant closings

GM announced on Monday they plan to slash salaried staff by 15% and close five facilities in North America, including three plants in Michigan, Ohio and Maryland.

Posted: Nov 27, 2018 10:56 AM
Updated: Nov 27, 2018 10:58 AM

President Donald Trump has long promised to boost the US auto industry and bring manufacturing jobs back home.

That quest hit a major pothole Monday when General Motors announced it would slash its workforce and shut production at five North American facilities in Ohio, Michigan, Maryland and Ontario, Canada.

Some 8,000 salaried employees and 6,000 hourly workers will either lose their jobs or be reassigned to other plants, and more layoffs are likely on the horizon, industry experts said.

GM's move marks the first rounds of US plant closings since 2010, though the automaker has eliminated shifts and laid off workers at some US plants since early 2017 -- including at the Lordstown, Ohio, and Hamtramck, Michigan, plants now slated to be closed.

The retrenchment follows Ford's announcement last month of a reorganization of its global salaried workforce. The company did not say how many jobs would be eliminated or when the downsizing would take place. It is part of a broader plan to trim costs.

The moves undercut Trump's repeated claims about the positive effects of his economic policies -- including tariffs and massive corporate tax cuts -- on American industry and test his ability to stand against the tide of fundamental forces reshaping the economy.

Trump openly chastised GM CEO Mary Barra on Monday, saying that he'd been "very tough" when they spoke about the closures.

"I spoke to her and I expressed the fact that I am not happy with what she did. You know, the United States saved General Motors, and for her to take that company out of Ohio is not good," he told reporters on the South Lawn as he left for two campaign stops in Mississippi.

A White House official said Barra was still at the White House for a previously scheduled meeting with economic adviser Larry Kudlow as Trump spoke.

Throughout his 2016 campaign, the President repeatedly vowed to revive America's manufacturing sector, particularly the auto industry. He lashed out at automakers for shuttering plants and sending jobs to Mexico, calling out GM in particular shortly before taking office. He promised to renegotiate NAFTA to stem the flow of jobs south of the border.

Early on, the big three US automakers announced large investments in their domestic operations, though several were part of deals negotiated a few years before. Ford canceled plans to build a new plant in Mexico, investing $700 million and creating 700 jobs in Michigan instead. Fiat Chrysler Automobiles said it would pour $1 billion into expanding factories in Ohio and Michigan, creating 2,000 jobs. GM announced it would invest an additional $1 billion, which would create or retain 1,500 jobs.

Toyota and Mazda earlier this year unveiled a plan to jointly build a $1.6 billion plant in Huntsville, Alabama that will employ 4,000 workers.

Employment at motor vehicle and parts manufacturers has nudged up only 1.4%, or 13,000 jobs, during Trump's time in office. That follows years of strong hiring in the aftermath of the 2009 bankruptcies and bailouts of GM and Chrysler. The sector added nearly 300,000 jobs under President Barack Obama.

The auto industry has had to contend with a slowdown in business in recent years. Sales set a record of 17.6 million cars and trucks in 2016, but have drifted downward since.

"We don't need more car plants in the US," said Michelle Krebs, executive analyst at Autotrader. "We already have enough factories to produce the vehicles that they need to make. When you don't have sales going up, you don't need to build more vehicles."

Slower sales, combined with a shift away from sedans and towards SUVs and an increased interest in electric vehicles and self-driving cars, has forced the sector to revamp its operations.

"We will see more layoffs, probably from Ford, even while they expand job listings to more technology-advanced positions. Again, this is about investing in future technology and sadly older (and expensive) workers tend to get caught up in the changing tide," said Rebecca Lindland, a senior analyst with Cox Automotive. "This has been going on for years and is not specific to the auto sector or during the Trump administration, although his policies on tariffs certainly have not helped."

While GM did not mention trade in its announcement, Trump's aggressive protectionist policies are also weighing on US automakers.

They've already been hurt by Trump's tariffs on steel and aluminum imports, and they're bracing for the possibility of new duties on foreign-made vehicles and auto parts. For now the auto tariffs are only under consideration while the administration investigates their potential impact.

If Trump follows through with the threat, GM will be forced to choose between raising prices on consumers or eating the cost. But either way, the tariffs "could still lead to less investment, fewer jobs, and lower wages for our employees," the company said in a comment filed with the Commerce Department.

Trump's duties have invited other countries to impose retaliatory tariffs on US goods, too. After the European Union put tariffs on US-made motorcycles, Harley Davidson said it would shift some production to Europe in order to avoid the taxes. The company said Monday that it is still assessing the impact the move will have on America jobs.

Automakers across the board have faced rising material costs because of the tariffs on steel and aluminum, which went into effect earlier this year.

The duties have driven up the cost of production in the United States by $400 per vehicle, according to the American Automotive Policy Council.

"We think it's made the United States less conducive for investment. We're bearing a cost to produce here that's not experienced in other countries around the world," said Matt Blunt, the president of the association, which represents Fiat Chrysler, Ford and GM.

The tariffs could even wipe out benefits generated by Trump's replacement for the North American Free Trade Agreement, which the president is expected to sign Friday. The new trade pact, known as the United States-Mexico-Canada Agreement, aims to increase auto production inside the three countries.

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 74328

Reported Deaths: 3041
CountyConfirmedDeaths
Marion15860725
Lake7570275
Elkhart484384
Allen3902163
St. Joseph350081
Hamilton2763104
Vanderburgh196313
Hendricks1887108
Cass17959
Johnson1757118
Porter131639
Clark123347
Tippecanoe121111
Madison97965
LaPorte91130
Howard89065
Kosciusko85212
Bartholomew79347
Marshall78422
Floyd77946
Monroe75630
Delaware73052
Dubois69612
Boone67846
Noble67829
Hancock66038
Vigo65110
Jackson5865
Warrick58130
LaGrange55910
Shelby55327
Grant52630
Dearborn50828
Morgan47634
Clinton4343
Henry38320
Wayne37710
White36910
Montgomery35421
Lawrence34627
Harrison33823
Decatur33732
Putnam2888
Miami2742
Daviess27320
Scott26810
Greene25034
Jasper2432
Franklin24214
DeKalb2324
Gibson2254
Jennings22512
Steuben2103
Ripley2087
Carroll1912
Fayette1897
Perry18612
Starke1787
Orange17124
Posey1710
Wabash1693
Fulton1682
Wells1682
Jefferson1632
Knox1540
Whitley1526
Washington1401
Tipton13810
Spencer1363
Sullivan1261
Huntington1223
Randolph1224
Clay1215
Newton11810
Adams1012
Jay910
Owen901
Pulaski831
Rush804
Fountain742
Brown731
Ohio655
Blackford642
Benton610
Pike530
Switzerland520
Vermillion520
Parke511
Crawford450
Martin450
Union410
Warren221
Unassigned0206

Ohio Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 100848

Reported Deaths: 3669
CountyConfirmedDeaths
Franklin18317524
Cuyahoga13514499
Hamilton9643255
Lucas5348323
Montgomery436294
Summit3555222
Butler292963
Marion292545
Mahoning2554255
Pickaway238742
Stark1827139
Warren178939
Lorain177078
Columbiana165860
Trumbull1524106
Fairfield138732
Delaware130119
Licking128149
Clark114614
Lake111438
Wood104358
Clermont93311
Medina92335
Miami83938
Tuscarawas78214
Portage75861
Allen74044
Greene69012
Belmont62126
Mercer61213
Richland60412
Erie57527
Ashtabula56946
Geauga55644
Wayne53958
Ross4844
Huron3965
Darke39529
Ottawa38626
Hancock3783
Sandusky37716
Madison37410
Athens3571
Holmes3286
Lawrence2830
Auglaize2546
Union2511
Muskingum2361
Jefferson2292
Scioto2261
Seneca2143
Knox2057
Putnam20517
Preble2032
Washington20322
Shelby1944
Coshocton1936
Champaign1762
Crawford1745
Morrow1702
Hardin16512
Clinton1646
Highland1581
Logan1552
Fulton1481
Wyandot1468
Ashland1443
Defiance1444
Williams1353
Perry1303
Brown1292
Hocking1189
Guernsey1177
Henry1172
Fayette1130
Carroll1115
Monroe9318
Pike760
Jackson740
Van Wert711
Paulding690
Gallia651
Adams612
Meigs400
Vinton312
Harrison261
Morgan260
Noble160
Unassigned00
Fort Wayne
Few Clouds
88° wxIcon
Hi: 87° Lo: 68°
Feels Like: 96°
Angola
Few Clouds
88° wxIcon
Hi: 87° Lo: 68°
Feels Like: 94°
Huntington
Scattered Clouds
86° wxIcon
Hi: 88° Lo: 68°
Feels Like: 92°
Decatur
Clear
86° wxIcon
Hi: 85° Lo: 68°
Feels Like: 90°
Van Wert
Clear
86° wxIcon
Hi: 85° Lo: 68°
Feels Like: 90°
Storms return for Monday
WFFT Radar
WFFT Temperatures
WFFT National

Community Events