Is Trump to Blame for GM’s 15,000 Layoffs?
General Motors announced on Monday that it will halt production at five North American plants and lay off 15 percent of its salaried and contract workforce. In total, nearly 15,000 people will lose their jobs as a result of the large-scale move to restructure operations. “The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” CEO Mary Barra said as part of a statement that read like an exercise in corporate-speak Mad Libs. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
The reasoning for the move, the company says, relates to a need for larger vehicles like SUVs, as well as to self-driving and electric vehicles. GM is expected to save $6 billion as a result of the restructuring. Three assembly plants located in Oshawa, Ontario, Detroit, Michigan, and Lordstown, Ohio, will cease operations by the end of 2019. Two power-train plants located in White Marsh, Maryland, and Warren, Michigan, will do the same by the end of next year.
President Trump wasn’t happy. The Wall Street Journal reported Monday afternoon that Trump told Barra that GM “better damn well open a new plant” in Ohio quickly. The president relayed as much while speaking with reporters while stalking around the White House, making clear that he “was very tough” while expressing his dispelasure to Barra. “I’m not happy with what she did,” Trump added. “You know, the United States saved GM and for her to take that company out of Ohio is not good. I think she’s going to put something back in soon.”
TRUMP on GM plant closures: "We don't like it. I believe they'll be opening up something else. And I was very tough. I spoke with her when I heard they were closing and I said, you know, this country has done a lot for general motors. You better get back in there soon." pic.twitter.com/ggV5YgEwyz
— Aaron Rupar (@atrupar) November 26, 2018
Trump was similarly upset back in June when Harley-Davidson announced it would move some of its production overseas in order to “maintain a viable business in Europe” in the face of Trump’s trade war, which has hit the automotive industry particularly hard. Later the same week, GM filed comments with the Department of Commerce arguing that Trump’s tariffs on steel and aluminum imports would weaken their ability to compete abroad and could result in “fewer jobs and lower wages,” both overseas and in America. “The over-broad and steep application of import tariffs on our trading partners risks isolating U.S. businesses like GM from the global market that helps to preserve and grow our strength here at home,” the company said. GM also curtailed its profit forecast as a result of the tariffs, as did Ford and Fiat Chrysler.
Though GM did not cite Trump’s tariffs in its announcement Monday, the president’s continued insistence that everything will be fine and that those affected just need to be patient was a theme of the backlash to the company’s plans to restructure. “I implore [sic] President Trump to keep his word when he came to the Mahoning Valley last year and promised jobs were ‘all coming back. They’re all coming back. Don’t move. Don’t sell your house,'” said Rep. Tim Ryan (D-OH) in response to the layoffs in Lordstown. Ryan added that Trump has “been asleep at the switch and owes this community an explanation.”
I implore President Trump to keep his word when he came to the Mahoning Valley last year and promised jobs were ‘all coming back. They’re all coming back. Don’t move. Don’t sell your house.’ (4/8)
— Congressman Tim Ryan (@RepTimRyan) November 26, 2018
Both Ryan and Sen. Sherrod Brown (D-OH) pointed out that GM received a large tax break from the bill Republicans passed last December, but still opted to open a new SUV plant in Mexico rather than the United States. “The workers at Lordstown are the best at what they do, and it’s clear once again that GM doesn’t respect them,” wrote Brown. “Ohio taxpayers rescued GM, and it’s shameful that the company is now abandoning the Mahoning Valley and laying off workers right before the holidays.”
GM owes the community answers on how the rest of the supply chain will be impacted & what consequences its disastrous decision will have on the Valley & Ohio. My office stands ready to do everything we can to help these workers. This decision is corporate greed at its worst. -SB
— Sherrod Brown (@SenSherrodBrown) November 26, 2018
GM may have been forced to restructure to accommodate a changing market regardless of whether Trump instituted tariffs on imported steel and aluminum, but the effect these tariffs — and the threat of potential tariffs on all imported automobiles — exacerbated the pressure to do so. GM announced on Monday that Trump’s tariffs have cost the company $1 billion, and that while they are not directly responsible for the layoffs, they are among the “headwinds,” as Barra put it on a conference call, that the company is facing as it struggles to remain profitable.
Companies across a number of industries have been forced to make cuts or shut down plants as a result of the tariffs, which don’t seem to be going away anytime soon. It hasn’t stopped Trump from touting them. In September, he tweeted about the economic boon they’re bringing to the United States. “Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country — and yet cost increases have thus far been almost unnoticeable,” he wrote. “If countries will not make fair deals with us, they will be ‘Tariffed!'”
Editor’s note: This story has been updated to clarify that a number of companies within various industries have seen reductions after the implementation of the tariffs.