General Motors withdraws from China! :: Investor.bg

Photo: Reuters

US President Donald Trump criticizes General Motors job cuts. In an interview with the Wall Street Journal, he called a group to stop production in China. GM should have preferred to produce its cars in the United States, said the head of state.

As it became clear Monday, the manufacturer plans to close a few factories as part of its transformation into an electric car manufacturer and significantly reduce its workforce in North America. The reason is a sharp drop in demand for limousines in the United States and rising costs.

Speaking to reporters, Trump said he was not satisfied with General Motors' decision to close his production plant in London, Ohio. He personally told GM's GM, Mary Bara. Barra badured him that the measure had nothing to do with the recently imposed protection duties. The decision was due to weak sales. That's why Trump advised him to put on the market a well-sold car.

Earlier Monday, GM announced serious job cuts in North America. This measure is part of a broader austerity program, which should prepare the group for the future and provides for drastic cost reductions. The president of GM Barra justified his decision by the need to adapt to the changing market conditions. The overall goal is to "position the company for long-term success," she said in a press release.

GM wants to stop the production of low-selling models and focus more on innovative areas such as electric vehicles and autonomous cars. This is why, according to Barra, a radical restructuring of the company is necessary. In the United States and Canada by the end of 2019, five production plants could be closed and approximately 6,000 workers would lose their jobs. In addition, the company will stop producing in two international plants.

The number of employees in North America will be reduced by about 15%. A quarter of them are executive positions, which should simplify decision-making. The cuts could reach between 10,000 and 15,000 employees, US media reported. With these measures, GM wants to reduce its costs by about $ 4.5 billion by 2020. First, the extraordinary costs will cost up to $ 3.8 billion.

Exchange participants have accepted the news, the stock has reacted 5.7%. In fact, GM's business has been doing well for some time: revenues for the summer quarter jumped 6.4% and net profit was surprisingly high at $ 2.5 billion.

For US President Trump, the layoffs announced are a big problem. After all, he promised to help the American industry to make a comeback and create more jobs than ever before. However, the trade disputes initiated under US policy as a first policy have so far had considerable negative consequences for US builders such as GM and Ford. like steel.