GM Fires Back at Trump, Says It Won’t Be Swayed on Ohio Plant Closure
President Donald Trump has taken to Twitter to voice concern over how unhappy he is over the closure of a General Motors plant in Ohio, particularly because of how important the swing state and its electoral college votes are to his reelection, but GM said Monday it will not be swayed.
“GM: To be clear, under the terms of the UAW-GM National Agreement, the ultimate future of the unallocated plants will be resolved between GM and the UAW.”
Trump urged GM CEO Mary Barra to “do something quickly” to reopen its Lordstown, Ohio, plant that was recently idled.
“I am not happy that it is closed when everything else in our Country is BOOMING,” Trump tweeted.
GM announced in November it was slashing up to 15,000 jobs and closing up to five plants in North America, including the Lordstown plant where the Chevy Cruze was produced. With gas prices remaining steady between $2.50 and $3.50 a gallon across the country, buyers have been far more interested in crossovers and SUVs than smaller sedans like the Cruze.
Ford also has stopped making its Cruze rival Focus, and FCA quit making the Dodge Dart due to waning demand for smaller cars. GM, Ford and Chrysler moved most or all of their small-car production outside the U.S. years ago to places like Mexico and other countries where labor is cheaper.
Automakers apparently don’t make any money or even lose money on small cars, and moving production off-shore helped cut those losses or allowed them to break even.
GM was the exception to that rule after it cut a deal with the United Auto Workers a decade ago to produce the Cruze in Ohio.
GM figures to eliminate 1,700 hourly workers at Lordstown. The plant has been producing vehicles for 50 years.
GM and the UAW will be negotiating a new contract later this year. Currently, the UAW is suing the automaker claiming that the current contract prevents GM from idling plants. That contract expires in mid-September. Two years ago, the plant employed 4,500 workers.
Trump has been courting the labor vote since he began running for President in 2015. Along the way, he promised he would stick it to manufacturers that off-shored manufacturing, especially to Mexico and China. He has imposed steel tariffs, for example, trying to force U.S. manufacturers to use U.S. steel and drive up business for U.S. steelmakers across the board. He is also threatening tariffs on imported cars, even on companies like BMW, Toyota and Honda that have located large manufacturing facilities in the U.S. The automakers have complained that the steel tariffs have added more than a billion in costs per company per year and that the tariffs are contributing to their need to cut jobs.
One of Trump’s many weekend tweets read: “Because the economy is so good, General Motors must get their Lordstown, Ohio, plant open, maybe in a different form or with a new owner, FAST! Toyota is investing 13.5 $Billion in the U.S., others likewise. G.M. MUST ACT QUICKLY. Time is of the essence!”
GM issued a statement timed to be a retort to Trump. “To be clear, under the terms of the UAW-GM National Agreement, the ultimate future of the unallocated plants will be resolved between GM and the UAW. We remain open to talking with all affected stakeholders, but our main focus remains on our employees and offering them jobs in our plants where we have growth opportunities. We have now placed over 1,000 employees from our unallocated plants to other GM locations, and we have opportunities available for virtually all impacted employees.”
Ohio is politically very important heading into 2020. Not only is it considered a bellwether swing state that Trump carried in 2016, but former Ohio Governor, a Republican, John Kasich is a frequent and vocal critic of Trump, and is a possible challenger to the President in a primary battle.
In many ways Lordstown is a throwback plant, having been dedicated the last several years to one model, and a small car at that. It is a longshot that GM would locate a new crossover utility vehicle or SUV at Lordstown after labor negotiations. The likely outcome is that the plant will shutter for good.