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GM is closing plants. Now its CEO has to explain why to Congress

General Motors chief executive Mary Barra is heading to hostile territory: Capitol Hill.The automaker...

Posted: Dec 5, 2018 3:28 PM
Updated: Dec 5, 2018 3:28 PM

General Motors chief executive Mary Barra is heading to hostile territory: Capitol Hill.

The automaker's plans to close four US plants has turned GM into "the most thoroughly disliked company in Washington, DC, right now," Debbie Dingell, a Democratic member of the House from Michigan, told CNN last week.

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Barra will aim to change that in her meetings with members of Congress, which are scheduled for Wednesday and Thursday, according to a person familiar with discussions.

She will sit down with congressional delegations from each of the three states where the targeted plants are located — Michigan, Ohio and Maryland.

"I look forward to continuing our engagement with GM," said Senator Rob Portman, Republican from Ohio, where the company said it plans to shut its 52-year old facility in Lordstown. "I hope the company sees the incredible potential in this plant by keeping it open."

GM said it needs to cut about 8,000 salaried workers, as well as about 3,300 hourly workers at the four US plants, to cut costs and invest more in the next generation of electric and self-driving cars.

The plants currently slated to close are in Lordstown; Detroit and Warren, Michigan; and Baltimore.

The plans to shutter the plants has caused a backlash on both sides of the aisle.

"This company has done something that nobody else has done for the last two years — Republicans and Democrats united," said Dingell, a former GM executive.

In one example of that bipartisanship, Democratic Senator Sherrod Brown of Ohio, released a joint statement with Portman calling on GM to change its decision on the Ohio plant.

"Senator Portman and I are committed to saving these jobs and call on GM to work with us to find solutions," said Brown.

The meetings come just as the Trump administration is pressuring European carmakers to increase production in the US — and asking Congress to ratify Trump's replacement for the North American Free Trade Agreement, which the Trump administration hopes will attract manufacturing back to the United States.

Dingell said last week that she particularly wants to ask GM if it planned to build new plants in Mexico at the same time they are planning to close US plants.

"We need to get a far better understanding of what GM is up to. I don't like what I'm hearing on the grapevine, which is that they're going to move production to another country," she said. "We need to understand what their product plans are."

But GM has insisted it is not looking to shift production to other countries. Instead it will stop building the cars built at the Lordstown and Detroit plants, such as the Chevrolet Cruze, Impala and Volt, the Buick LaCross and the Cadillac CTS. engines for those models. GM says it's dropping those products because there's less demand for car models as car buyers shift to SUVs.

GM's plans have also come under attack by President Donald Trump, who vows to take action to cut government subsidies going to GM as a way of forcing it to keep the plants open. Dingell said she would support Trump taking action against her former employer.

"I'm not sure they showed an ounce of support or caring for the working men and women who were impacted by this announcement," she said.

But the money GM gets from government research grants and even from sales of cars to the federal government pales in comparison to the annual cost savings of $6 billion that GM says it will achieve with these cuts.

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