By: Steve Dellar | 11-28-2018 | News
Photo credit: Twitter @detroitnews

Why GM Caused An Unforeseen Bloodbath In Trumpland

Strong economic headwinds, according to General Motors' statement, are the reason for the biggest reorganization since America's most important automaker went bankrupt a decade ago.

Back in 2008, only one day after it officially went bust, American tax dollars assured that it could already make a fresh start. Ever since then, GM has only grown, partly due to low-interest rates and oil prices.

US consumers purchased new and ever larger cars from them. Proud to do so as it was an all-American brand.
The best years now seems behind them again. Even GM's CEO Ms Mary Barra does not explicitly say it, but this is partly due to the policies of the current US President.

Because of the White House’s import duties on steel, the costs for General Motors have increased by 1 billion dollars as American steel magnates increased their prices as foreign steel and aluminum had become more expensive.

In addition, sales to China fell as a result of the trade dispute with the US. Another pertinent example is Tesla, which also saw October sales fall by as much as 70 percent. That particular decline is also (partly) caused by Chinese customers having postponed their purchases.

Also, the taste of the American consumer has changed in the past few years, and GM did not adapt its factories to this.

SUV versus sedan

The traditional sedan, the classic model with a boot, is seeing fewer sales whilst SUVs and trucks are flying out the door.

Two-thirds of all new cars in the US are SUVs.

Some of GM's plants are barely able to handle demand let production run seven days a week. Others don’t have much to do.

Furthermore, analysts expect that this year car sales in the US will not exceed seventeen million units. That is the first time in years.

Due to the decreasing demand in some factories, only one shift is used instead of the usual three.
The old-fashioned way GM produces didn’t help either: in many factories, only one model is built. If demand for that model falls, problems soon arise.

To complete the gloomy picture, car manufacturers also face increasing costs. Partly because of the many billions that they have to put into the transition to electric and autonomous cars.

Time to 'rightsize' as GM boss Barra calls the reorganization. This mainly means a substantial cut in staff costs, if only because fewer employees are needed for the construction of electric vehicles. E-cars have fewer parts than a model with a combustion engine and transmission. "This industry is changing very quickly," Barra said during a press conference. "We have to do this to strengthen our core activities."

Related coverage: GM Cuts Astonishingly Deep In Trump Heartland (Video).

Trump strongly condemned the announced closure. The president won in Ohio in 2016 with the promise that he would bring back jobs. It is here that GM is now closing one of its factories.

The US President realizes that the chances of a possible re-election in 2020 do not bode well with a declining economy. He demands that GM produce a new model in Ohio or threatens to cut state subsidies. "They'd better bring something back," President Trump said.

It is uncertain whether American car bosses will be listening to Trump's threatening language.

For example, the American factory where the Chevrolet Cruze is built will be closed, while GM will probably keep the facility in Mexico where the same model is produced, much to the irk of US consumers.

One bright spot is that GM intends to hire more and more young whizzkids to program the software for its self-driving vehicles. More jobs for the higher educated employees thus.

Problem is that they vote less often for Trump.

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11 Comment/s
Calamity May No. 91815 2018-11-28 : 14:02

Typical ancient, slow-moving American car company. Zero-Low innovation. Zero trend forecasting. Can't turn around quickly or, let's layoff workers.
Putting eggs in electric and driverless cars ? How 'bout some mighty gas-sippers, akin to the popular & affordable Honda Fit? Or new combustion engine design...long overdue.
WE gave them $13.4 billion in 2008. And we get crap.
We need forward-thinking industries that make great stuff with new material science, and new (free) energy sources.
Hate to say it, but GM just may be obsolete.

Anonymous No. 91816 2018-11-28 : 14:34

Don't forget Dodge and Ford moving production to Mexico. These are all globalist brands suckling the NWO

john No. 91818 2018-11-28 : 14:55

GM is simply making excuses to put the blame on trump and the steel industry. GM should produce their own steel instead of depending on China. Those autonomous and electric cars Gm is going to build will not sell in the USA. Americans will not buy that junk! The main problem with GM isn't with the type of cars they sell but the quality of the cars they sale. They make junk in Mexico and China and then try to sell it over here. The tariffs President Trump has imposed on China will force manufacturers like GM to either start making cars in the USA or sale their wares elsewhere which is what GM seems to be doing. GM owes this country better treatment than they are dishing out. GM should be liquidated by the federal government and all of their assets seized to pay back the billions they stole from the American people. We could use the money to build the wall. Besides selling junk GM executives have made millions in profits for themselves on the backs of the American people. They are driven by greed and are nothing less than criminals.

Anonymous No. 91825 2018-11-28 : 15:37

this is how GM repays our bailing them out...HMMMM

Anonymous No. 91831 2018-11-28 : 15:58

Obama demanded electric shit cars, he got them then disregarded the technology and end products like he never ordered it. No one gives a shit about stupid electric cars or driverless nonsense. If American car producers stuck with American home factories, horsepower, and quality, no problems would of sprung up.
MAGA Shut them down Trump!!!

IbackAmerica No. 91834 2018-11-28 : 16:33

John is right, GM is ungreatful for the bailout and sided with Obama on his stupid electric cars. Remember the 1500 electric cars obama purchased to boost non-existent sales, Bobo used taxpayer money and they sit in a government garage in Virginia. GM didnt change with the consumer. GM should be forcrd to buyout every Employee pension plan so those people aren't hurt. Shame on GM.

Anonymous No. 91836 2018-11-28 : 17:14

General Motors and its subsidiaries have so far received $76 million in federal grants and state tax credits during 2018, according to data from

Anonymous No. 91858 2018-11-29 : 06:17

He's right protect American workers

Anonymous No. 91859 2018-11-29 : 06:18

Enough with the bailouts and corporate welfare.

Anonymous No. 91872 2018-11-29 : 12:28

Interesting these factories are leaving the swing states where Trump’s base is for strictly political reasons in order for his to base to be mad at him later for losing those jobs.

It must be a coincidence that GM CEO Mary Bara is also mentioned in Podesta’s emails at Wikileaks, unfortunately she is a swamp puppet for the DS too.

Anonymous No. 92033 2018-12-02 : 03:28

If you want to see truly boring cars, buy American. I was shocked at how badly engineered the interior of the Ford Mustang was, it literally kept me from buying one.

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