Published: Wed, November 28, 2018
Business | By Eloise Houston

GM to Cease Production of Chevy Cruze at Lordstown Plant

GM to Cease Production of Chevy Cruze at Lordstown Plant

President Donald Trump said he may try to eliminate electric auto subsidies for General Motors Co. after it announced it will close factories and lay off thousands of USA workers.

"In contrast to times past, General Motors under CEO Mary Barra is trying to get ahead of a potential crisis by making cuts now", Michelle Krebs of Autotrader said in a client note.

Needless to say, GM is feeling the heat and made a decision to respond with a short statement saying it is "committed to maintaining a strong manufacturing presence in the U.S".

At a rally near the plant last summer, Mr. Trump talked about passing by big factories whose jobs "have left OH", then told people not to sell their homes because the jobs are "coming back". The company said Monday it plans to cut about 8,000 of its 54,000 salaried workers in North America. That means GM needs to allocate more resources to purely electric cars, unlike the hybrid Volt, and to autonomous technology, Barra said.

"We think it's appropriate to get in front of it while the business and the economy are strong". Fiat Chrysler Automobiles got out of small and midsize cars two years ago, while Ford announced plans to shed all cars but the Mustang sports vehicle in the U.S.in the coming years. Some 75 percent of its global sales will come from just five vehicle architectures by the early 2020s.

But Trump warned his administration is now considering cutting all subsidies for GM, including for electric vehicles. The President continued in a follow up tweet. Ford said in April it planned to stop building almost all cars in North America.

The US automaker explained its decision as a response to a slowdown in new-car sales, as well as to consumers shifting toward pickup trucks and sport-utility vehicles.

GM will stop production at the following three plants: Lordstown, Ohio; Hamtramck, Michigan; and Oshawa, Ontario.

Trump's belligerent approach to companies behaving in ways he feels make him look bad reveals his inclination toward an authoritarian view of politics and economics.

The decision is "devastating" for workers at the plant and auto suppliers, but Oshawa has adapted over the years and will survive this as well, DesRosiers added.

The planned job reductions, which triggered political pushback in the Midwest U.S. and Canada, come on the heels of surprisingly strong third-quarter earnings.

The move is likely to lead to the loss of more than 14,000 jobs in North America, including over 6,100 shift workers at the plants. "We're sick and exhausted of General Motors shipping all our jobs to Mexico", he said at a press conference in Oshawa, Ontario.

"It's hard to keep on thinking that he's going to fight for us, " Wolikow said.

While GM did not cite tariffs for the plant closure, Trump's trade crackdown has created problems for the auto industry.

Keeley is one of the thousands of workers at GM's Lordstown factory near Youngstown who learned that the plant is being idled in March, with no new production promised.

GM opened the Lordstown plant in the late 1960s in the southwest corner of Trumbull County.

Ms Keller added that boosting electric-car output will be important for the Chinese market. The credit begins to phase-out after an automaker sells 200,000 eligible vehicles, such as the Chevrolet Bolt electric auto. Also, GM imports the Buick Envision midsize SUV from China.

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