Car manufacturer General Motors wants to save around 6 billion dollars with a restructuring plan by the end of 2020. The company is, therefore, going to scrap 15 percent of the workforce or more than 15,000 jobs in the United States and Canada where it will close five factories.
At the end of 2019, GM will also close two factories outside the American continent. President Donald Trump is not happy with the decision and even demands that GM stops producing in China.
Job losses would affect a quarter of all management positions. According to the carmaker, the major interventions are necessary to remain profitable. The company says it is preparing for a future with a larger number of fully electric vehicles. The four factories in the United States and one in Canada could be closed by the end of next year.
Surprisingly enough, GM had good results in the past quarter.
"We take these measures at a time when the economy is strong," says CEO Mary Barra. "The industry is changing very quickly. We want to be sure that we are well positioned."
“We are taking this action now while the company and the economy are strong to keep ahead of changing market conditions,” Ms Barra said in a conference call. GM’s share price rose 5.5% on the news.
According to management, GM is implementing the measures due to weak sales of smaller passenger cars in the US and higher material costs.
President Trump, who won over voters in many of the states affected by GM’s decision by promising to save their jobs, told reporters he was not happy with the decision. “We don’t like it,” he told reporters. “This country has done a lot for General Motors. They better get back to Ohio, and soon.”
“I stressed the fact that I am not happy with what she did,” Trump said as he departed the White House for campaign rallies in Mississippi. “You know, the United States saved General Motors and for her to take that company out of Ohio is not good.”
The car plants, known as Lordstown Assembly in Ohio, Detroit-Hamtramck Assembly and Oshawa Assembly, all build slow-selling cars. Just last year, President Trump held a rally close to the Lordstown plant and told workers not to sell their homes because “jobs are coming back”.
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