GM drives a gi­ant hole

Pres­i­dent’s Amer­ica First call is ditched as US plants are axed by car­maker. David Mill­ward re­ports

The Sunday Telegraph - Money & Business - - Transport trouble -

In the sum­mer of 2017, Don­ald Trump ap­peared in front of an ador­ing crowd in Youngstown, Ohio, to hail how his ad­min­is­tra­tion had de­liv­ered on its prom­ise to bring manufacturing jobs back to the state. “Let me tell you folks in Ohio and in this area, don’t sell your house. We’re go­ing to get those jobs com­ing back, and we’re go­ing to fill up those fac­to­ries or rip them down and build brand new ones. It’s go­ing to hap­pen,” he said.

It now looks as if his op­ti­mism was mis­placed af­ter Gen­eral Mo­tors’ CEO Mary Barra an­nounced that the car­maker was moth­balling its plant in Lord­stown – about 17 miles away from Youngstown – and lay­ing off more than 1,400 work­ers.

In all GM is ax­ing nearly 15,000 jobs in North Amer­ica.

Four other plants will also go along with Lord­stown. Pro­duc­tion will cease at White Marsh, Mary­land; War­ren, Michi­gan; Detroit-ham­tramck, Michi­gan; and Oshawa, Canada.

GM is scrap­ping a raft of mod­els in­clud­ing the Chevro­let Im­pala, Cruze and the Volt – an elec­tric hy­brid that was once seen as the fu­ture of mo­tor­ing. The Cadil­lac CT6, Cadil­lac XTS and the Buick Lacrosse, rather more op­u­lent lux­ury sa­loons, are also be­ing dropped.

Not sur­pris­ingly the US pres­i­dent is an­gry, vent­ing his fury when he spoke to re­porters and then on Twit­ter as he threat­ened to cut sub­si­dies to the com­pany; some­thing he can­not do with­out Con­gres­sional ap­proval.

“Noth­ing be­ing closed in Mex­ico and China. The US saved Gen­eral Mo­tors and this is the thanks we get!”

An­a­lysts in Wash­ing­ton be­lieve Trump’s anger re­flects the po­lit­i­cal dam­age he fears the lay­offs will do to his re-elec­tion chances in rust belt states. Even be­fore the GM an­nounce­ment, there were signs that sup­port was weak­en­ing in Michi­gan, where the Democrats flipped two con­gres­sional seats and won the gov­er­nor­ship. “The fact that these fac­to­ries are be­ing closed in Ohio and Michi­gan is very bad for Trump, es­pe­cially con­sid­er­ing his cam­paign prom­ises that no fac­to­ries would be idled there and that he would make sure new ones opened,” said Bran­don Bar­ford, a part­ner at Bea­con Pol­icy Ad­vi­sors. “Those re­marks will be played in 2020 cam­paign ads over and over with Democrats say­ing Trump didn’t keep his prom­ises and gave com­pa­nies like GM a huge tax cut while they laid off Amer­i­cans.”

Ohio’s Demo­cratic se­na­tor, Sher­rod Brown, who is re­port­edly mulling over run­ning for the White House, lashed out at the com­pany when news of the job cuts broke.

“The work­ers at Lord­stown are the best at what they do, and it’s clear once again that GM doesn’t re­spect them. 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,” he said.

“This de­ci­sion is cor­po­rate greed at its worst.”

Car man­u­fac­tur­ers have not been helped by the ad­min­is­tra­tion’s de­ci­sion to im­pose tar­iffs of 10pc on alu­minium and 25pc on steel.

The levies were op­posed by the Amer­i­can Au­to­mo­tive Pol­icy Coun­cil, which rep­re­sents the car in­dus­try. “We are con­cerned with the un­in­tended con­se­quences the pro­pos­als would have, par­tic­u­larly that it will lead to higher prices for steel and alu­minium here in the United States, com­pared to the price paid by our global com­peti­tors,” it warned. “This would place the US au­to­mo­tive in­dus­try, which sup­ports more than 7m Amer­i­can jobs, at a com­pet­i­tive dis­ad­van­tage.” Even though GM sought to play down the im­pact of the tar­iffs, some experts be­lieve they have hit the in­dus­try hard.

“It raised the cost of pro­duc­tion,” said Dun­can Wood, the di­rec­tor of the Mex­ico In­sti­tute of the Woodrow Wilson Cen­tre for In­ter­na­tional Schol­ars in Wash­ing­ton.

“It’s com­ing at a time A car worker as­sem­bles the front end of a Chevro­let Cruze, made by Gen­eral Mo­tors in Youngstown, Ohio, above; the state was a key cam­paign ground for Don­ald Trump, left, dur­ing the pres­i­den­tial elec­tion

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