General Motors: The end of Donald Trump's illusion

Even for Dave Green, it was a nasty surprise. "My phone rang this morning at six o'clock this morning," said the UAW auto union district chief in Lordstown, an industrial city in east Ohio. "I was told to come to a meeting at nine o'clock."

It was less of a discussion than the announcement of bad news: the economic heart of Lordstown, the existing factory since 1966 of the largest American car company General Motors, in which Green and his 1,200 colleagues will work to close the 1st March of next year.

"It was as if someone had kicked me in the belly," Green said a little later in the UAW branch diagonally across the door from the door. GM factory. Behind him, on the wall shelves, were dozens of trophies won by automakers for their work, flanked by a proud US Stars and Stripes.

But Green was militant: "I do not lose hope."

However, this hope is slim as GM stops producing the Chevy Volt completely – the only model the band still manufactures in Lordstown. The hammer also falls: in late 2019, GM wants to close three US factories and two others in Canada, including the former Hamtramck factory located near the Detroit head office, where Chevys, Cadillac and Buick leave the chain.

The places are threatened with desolation

Nearly 15,000 GM employees in North America are affected by this reduction: 15% of the workforce, including a quarter of executives. GM expects to cut nearly $ 6 billion a year by 2020 from plant closures and the settlement of several older models.

"We are organizing Christmas parties for kids," Green complained, adding that the measures were not aimed solely at factory workers. But only in Lordstown, indirectly, 10,000 employees of suppliers and other businesses – not to mention restaurants, medical offices and surrounding hospitals.

The funds are complex. The official explanation is that in the United States and China, the largest market for GMOs, demand is shrinking as preferences and technologies change. The most dangerous rivals are found in Silicon Valley – tech companies like Google, Apple and Tesla with their autonomous cars.

But that's probably only part of the truth.

The other sounds like this: Like the rest of the networked automotive industry, GM suffers from the aftermath of the trade war that US President Donald Trump has launched against the rest of the world. In October, Ford, the number two in the US market, announced similar reductions: Trump 's steel and aluminum tariffs, according to the information provided, would have cost Ford $ 1 billion up to $ 1 billion. Now.

GM also announced additional costs of $ 300 million in the last quarter, linked to higher prices for steel and aluminum. The problems may be exacerbated when Trump takes seriously the tariffs of the car with which it is threatened for months, despite the protests of his own advisers.

But as always, Trump rejects all responsibility and sends it back to GM. "I'm not happy," he said Monday at the conclusion of a "very difficult" phone conversation with GM's director, Mary Barra, but that was nothing to to see with its commercial policy. In an interview with The Wall Street Journal, he said, "You are meddling in the wrong person," he threatened the company. GM had to stop building cars in China and quickly "reopen" a plant in Ohio.

Behind the subtle words of Trump, however, his future is more likely to be worrying. In the 2016 presidential election, he had clearly won in areas where GM plants are threatened. He then came to Youngstown, the neighbor of Lordstown, to swear to the workers to recover all the jobs lost in previous decades: "They all come back," he shouted at them. "Do not move, do not sell your house!"

Now, it's the opposite that's happening – not auspicious for Trump's expected reelection in 2020: the worker hero can disappoint them. It's the end of an illusion that has always been transparent to others.

GM shareholders are the only ones to celebrate this debacle: the share price has risen nearly five percent after the announcement of the news.