GM drives a giant hole
President’s America First call is ditched as US plants are axed by carmaker. David Millward reports
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