GM Downsizing in North America: Closing Factories, Cutting Jobs

GM Downsizing in North America: Closing Factories, Cutting Jobs

Last Tuesday, November 27, Mike Colias of the Wall Street Journal reported that GM will close several factories in North America and cut up to 14,800 jobs. Spurred by slowing sedan sales, the changes affect plants in Michigan, Ohio, and Canada. This is the first major downsizing since the company’s bankruptcy in 2009. Reducing GM’s annual costs by $4.5 billion by the end of 2020, GM hopes this savings will allow for more investment in electric and self-driving vehicles.

Considering the benefits the federal government has given to GM, which includes a tax-shield from pre-bankruptcy losses, the net-cost of the 2009 auto bailout, and a federal tax credit for people buying plug-in cars, GM’s decision faces backlash.

Both President Trump and Canada’s Prime Minister Justin Trudeau called GM Chief Executive Mary Barra to share their disappointment. President Trump has spoken out against GM before this announcement. Early last year, he criticized GM for a plant in Mexico, and as of Monday, he told GM to replace plants in China with more in the U.S.

The frustrations from President Trump, Prime Minister Trudeau, and main auto workers union raises challenges on the future benefits people can expect to receive from a company whose home-government invests public money into that company.

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