GM to slash 14,700 jobs in North America

GM to slash 14,700 jobs in North America

GM to slash 14,700 jobs in North America

President Donald Trump said he may try to eliminate electric vehicle subsidies for General Motors Co. after it announced it will close factories and lay off thousands of US workers. Now, GM says the Cruze will no longer be sold in the USA and production will end March 1.

Trump said he expected General Motors to start manufacturing another type of auto in OH and that it "had better" do so. A day earlier, Trump issued a vague threat to GM warning it to preserve a key plant in the presidential bellwether state of OH, where the company has marked its Lordstown plant for closure.

GM's stock price surged on the heels of the announcement, closing at 37.65, up almost 5 percent on the day.

The largest US automaker said on Monday it would cut thousands from its North American workforce, slash production and eliminate some slow-selling vehicle models. The company has sold about 22,000 through September and in August sought an exclusion from 25 percent US tariffs imposed on Chinese vehicle imports.

GM will stop production at the following three plants: Lordstown, Ohio; Hamtramck, Michigan; and Oshawa, Ontario. Also on the line are transmission factories in Warren, Michigan, as well as Baltimore.

In a press briefing Tuesday, top White House economic adviser Larry Kudlow insisted that, although GM's massive layoffs are "brutal", the job losses won't affect the economy more broadly.

Trump told The Wall Street Journal that he spoke with GM CEO Mary Barra on Monday and told her that GM "better damn well open a new plant there pretty quickly". But investors obviously like what they see so far: the company moving to cut its labor costs to brace for lower auto sales, even if it means putting thousands of workers on the unemployment line. The brand will discontinue the Chevrolet Cruze, Impala, Volt, Cadillac CT6, Buick LaCrosse and will instead focus on their SUVs and trucks. He did not specify how much GM receives in federal subsidies. Some 75 percent of its global sales will come from just five vehicle architectures by the early 2020s.

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Youngtown is in a Democratic and labor stronghold, where Trump won over a surprising number of voters two years ago because of his promise to bring work back to the U.S.

The reduction includes about 8,000 white-collar employees, or 15 percent of GM's North American white-collar workforce.

"GM workers have been part of the heart and soul of Oshawa for generations - and we'll do everything we can to help the families affected by this news get back on their feet", he said. "So far President Trump has been asleep at the switch and owes this community an explanation", Ryan said Monday.

Overall GM said the shake-up would lead to cost savings of around £4.7 billion by 2020.

General Motors Co will cut auto production, stop building several slow-selling models, and slash its North American workforce, its biggest restructuring in North America since its bankruptcy a decade ago.

Trump's steel tariffs have reportedly cost GM and Ford £780m each. Morgan Stanley said investors now see GM as "a victor in Auto 2.0".

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