Trump threatens General Motors subsidies over plant closings

Trump threatens General Motors subsidies over plant closings

The GM CEO met with Kudlow at the White House on Monday shortly after announcing plans to shutter five factories in the us and Canada and lay off about 14,000 employees. Its shares rallied 7.6 percent to $38.66.

Kristin Dziczek of the Center for Automotive Research in MI argued it would be short-sighted for the federal government to target GM's electric cars for punishment, since those are expected to play a growing role in the industry's future. The brand will discontinue the Chevrolet Cruze, Impala, Volt, Cadillac CT6, Buick LaCrosse and will instead focus on their SUVs and trucks.

GM isn't the first to abandon much of the vehicle market.

In a press statement, the company said it will close the Detroit-Hamtramck Assembly Plant in Detroit and Warren Transmission Operations in Warren. Five plants are also in jeopardy of closing. "This industry is changing very rapidly". Barra said the company would double resources dedicated to electric and self-driving vehicles over the next two years. They will be part of contract talks with the United Auto Workers union next year.

General Motors announced Monday that it is set to lay off roughly 14,700 workers, a number which represents 15 percent of all its salaried employees. GM is also slashing salaried and salaried contract staff by 15 per cent, which includes a quarter of its executives.

At the factories, 3,000 workers could lose jobs in Canada and another 3,600 in the US. Chinese consumers first bought more Chevrolets, Buicks and other GM vehicles than Americans did five years earlier.

"There is disappointment that it seems like GM would rather build its electric cars in China rather than the United States", Kudlow said, confirming that the administration was looking into cutting subsidies for the company.

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She also noted that tariffs on imported aluminum and steel have hit the company, but she stopped short of saying they had anything to do with the restructuring.

Barra did not link Monday's cuts to tariff pressures, but said trade costs are among the "headwinds" GM faces as it deals with broader technology change and market shifts.

"Well, it's one plant in Ohio".

A rule of thumb for the automotive industry is that if a plant is running below 80 percent of production capacity, it is losing money. GM has several plants running well below that.

"These actions will increase the long-term profit and cash generation potential of the company and improve resilience through the cycle", Barra said. She's taking steps to prepare GM for the future of transportation: driverless cars, electric vehicles and ride sharing.

"For decades, workers have devoted their lives, working day and night, to produce some of the finest cars in the country for General Motors". And speeding its demise would hurt American auto buyers. The industry has suffered falling sales in recent years in the crucial U.S. and China markets, at the same time as the trade war being waged between the countries is hitting earnings.

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