TRUMP STRIKES BACK: The President Considers 'Cutting' All GM Subsidies over Closures

Trump goes Godfather on General Motors

President Donald Trump on Monday angrily rebuked General Motors for its planned layoffs, demanding the automaker reverse its decision and threatening to move against the company if it failed to.

United States president Donald Trump blasted General Motors (GM) for making plans to close seven production plants, including four in the USA, and demanded that the firm find a vehicle that sells in sufficient quantities to be able to increase the company's activities in OH, a key U.S. election battleground.

GM shares jumped after the announcement, closing up 4.8 per cent on the day.

The battle with Trump puts Barra in a hard spot.

His tweets cited his disappointment with GM CEO Mary Barra and also referred to the 2008 government bailout of the USA auto industry.

It will be crucial for Trump to recapture states like Michigan, Ohio, Pennsylvania and Wisconsin if he is to win a second presidential term in 2020. "Their vehicle is not selling well, and we'll put something else and I have no doubt in the not too distant future, they better put something else". "Don't move. Don't sell your house.' So far, President Trump has been asleep at the switch and owes this community an explanation", said Northeast Ohio Rep. Tim Ryan, who represents Lordstown.

GM and its rivals are facing rising bills for technological transformation, increased risks from U.S. trade policy and investors reluctant to fund their traditional product strategies.

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GM slashing 15% of its salaried workers in North America

General Motors announced Monday it will cease production of the Chevy Cruze in early 2019 - the only vehicle its Lordstown plant produces. "It's nothing exclusive to GM", said Jeremy Acevedo, manager of industry analysis at Edmunds. "These are things we are doing to strengthen our core business". GM will discontinue the Cruze in the U.S. market by 2019. The Detroit automaker acquired 80 per cent of the German company in 1929 and purchased the remaining 20 per cent in 1931.

GM has announced that it will be closing five North American plants by the end of 2019, which will include the assembly facility in Detroit, Ohio and Ontario, Canada, as well as transmission factories in MI and Maryland.

The company has marked a sedan plant in Detroit, which makes the Buick LaCrosse, a compact auto plant in OH, and another assembly plant outside Toronto for possible closure. Ford said in April it planned to stop building almost all cars in North America. "Can't say anything final about that, but we're looking into it". Kudlow said. "We are going to be looking at certain subsidies regarding electric cars and others, whether they should apply or not".

The plan to cut 15 percent of salaried workers follows a round of buyouts that GM offered to about a quarter of its longer-tenured workforce at the end of October. The expenditures to bring those vehicles to production will start to hit with new batteries and body architectures created to generate profits.

She said GM is still hiring people with expertise in software and electric and autonomous vehicles.

What that would look like wasn't immediately clear: electric vehicles are eligible for a US$7,500 federal tax credit, but neither the president nor Kudlow provided additional details as to whether that's what they're reconsidering.

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.

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GM's actions provoked anger from political figures on both sides of the U.S.

However, spokeswoman Julie Huston-Rough denied the charge, telling AFP that "these products will not be manufactured in other locations for the North American market".

The iconic but sorely controversial Detroit-Hamtramck factory is among five facilities that will be shut down, pending talks with the relevant workers' union, starting next year.

"The US saved General Motors, and this is the THANKS we get!" The fall in new auto sales has troubled auto makers at a time when mainstays of the industry - private ownership and the internal combustion engine - are threatened by plans for shared vehicle schemes and electric cars.

Canada's Prime Minister Justin Trudeau said he told Barra about his "deep disappointment" in the decision, according to reports. "We must step away from the anti-worker thinking of seeking simply the lowest labor cost on the planet", Gary Jones, the union's president, said Monday.

While that's little comfort to the thousands of GM employees impacted by the changes, the company said many factory workers will have the option to transfer to other plants where the company builds more successful trucks, crossovers and SUVs. But investors obviously like what they see so far: the company moving to cut its labor costs to brace for lower vehicle sales, even if it means putting thousands of workers on the unemployment line.

Barra made a decision to scrap a US$1 billion investment in India in 2017 and stop selling Chevrolet models there.

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Most of the factories to be affected by GM's restructuring build cars that will not be sold in the USA after next year.

Which GM models will disappear and when? Through the first nine months of 2018, that had fallen to a little over 31 percent.

"The Lordstown plant is very important to 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.

Trump's aggressive trade policies have been aimed specifically at saving USA manufacturing jobs, including the renegotiation of the North American Free Trade Agreement which took aim at rules governing auto trade to favor the U.S. industry.

"I implore President Trump to keep his word when he came to the Mahoning Valley past year and promised jobs were 'all coming back".

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