After the announcement of job cuts: Trump calls for the withdrawal of GM from China

economy

Monday, November 26, 2018

Tens of thousands of General Motors employees will lose their jobs in North America in the near future. The automaker wants to do it with his own words, worthy of the future. US President Trump does not like it at all.

US President Donald Trump criticizes job losses at automaker General Motors. In an interview with the Wall Street Journal, he called on the company to stop car production in China. GM should prefer to produce its vehicles in the United States. General Motors wants to close several plants with conversion to electric cars and significantly reduce staff in North America. The reason is the sharp drop in demand for limousines in the United States and rising costs.

To reporters, Trump said that he was not satisfied with GM's decision to close a plant in Lordstown, Ohio. He told GM director Mary Barra. Barra badured him that the measure had nothing to do with the recently imposed protection tariffs. The decision, however, is due to meager sales figures. Trump then advised him, on his own, to put a car on the market, which sells well.

GM had previously announced a mbadive reduction in its workforce in North America. This measure is part of a major savings program designed to prepare the Group for the future and significantly reduce costs. GM's director, Barra, justified this measure by the need to adapt to changing market conditions. It was "positioning the company for long-term success," she said in a press release.

GM wants to abandon low-cost models and focus more on innovative areas such as electromobility and autonomous cars. For this, according to Barra, a radical restructuring of the company is necessary. In the United States and Canada, five manufacturing plants could be closed by the end of 2019. About 6,000 factory workers would lose their jobs. In addition, the company must be hired in two international factories.

GM's share reinforced by the decision

The number of employees in North America should be reduced by about 15%. A quarter of them are executive positions, which is supposed to simplify GM's decision-making process. The downsizing could affect between 10,000 and 15,000 employees, according to US media. GM plans to increase costs by approximately $ 4.5 billion by 2020. However, special expenses such as redundancy severance pay will initially result in charges of up to $ 3.8 billion. dollars.

On the stock market, the news has been well received: GM stock has seen a sharp rise in prices and recently posted a rise of 5.7%. In fact, GM's last activity was the same: during the summer quarter, sales rose 6.4%, net profit sinking to $ 2.5 billion.

For the US President Trump, the announced layoffs are a source of nuisance. After all, he promised to help the American industry make a big comeback and create more jobs than ever before for an American president. However, the commercial disputes initiated under the "America's First" policy have so far also had significant negative consequences for US automakers such as GM and Ford: the industry's heavyweights are fighting over major processing products such as steel, with increased material costs due to punitive tariffs.

Source: n-tv.de