November 28, 2018

GM Cuts Jobs

On Monday, General Motors announced that “actions are being taken to reduce salaried and salaried contract staff by 15 percent” and “put five plants up for possible closure as it abandons many of its car models and restructures to focus more on autonomous and electric vehicles, the automaker announced Monday.”

General Motors, AP News

President Trump tweeted in response, “Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies... for electric cars.”


See past issues

From the Left

The left is critical of Trump’s trade policies and empty campaign promises, but notes that ultimately there are much larger factors at play.

“Though a variety of factors contribute to business decisions like these, it’s worth remembering that General Motors warned in June that Donald Trump’s tariffs would adversely affect the company, leading to, among other things, ‘less investment' and ‘fewer jobs.’"


“Until now, it appeared President Donald Trump had done a good job of energizing the American economy, specifically when it came to jobs. Legitimately or not, he has been praised for record low unemployment -- now at 3.7%... That Trump's economic policies are in any way causing manufacturing plants to close and jobs to be eliminated could be a stake in the heart of the Trump presidential experiment."


While “it is largely true that Trump himself is not directly responsible for the layoffs, which will impact 14,000 workers in Ohio, Michigan, Maryland and Canada, and reflect complicated decisions that appear rooted in lagging sales... the problem for Trump... is that Trump has constantly asserted that such industrial job losses won’t occur on his watch."

Washington Post

But “even a competent president would not be able to replace all the factory jobs that were lost, because most of them didn't actually move overseas, as is the common refrain. Rather, they were automated. That's why U.S. factories are producing twice as much as they did in 1984, but have shed over 5 million jobs since 1987. That's also why Trump's solution, to impose heavy tariffs on our trading partners, has not worked and has in fact killed more jobs by making everything more expensive."


“What GM and every competitive American company does is follow the customers… last quarter General Motors sold more vehicles in China than in the United States. Making cars in America for export to China would render them ‘structurally unprofitable’... It would be helpful if Trump recognized that being president doesn’t make him economy czar... he can’t force companies to continue to operate factories that aren’t profitable."

Chicago Tribune

“As 14,000 people and their families fretted looming unemployment, with Christmas just weeks away, investors celebrated. GM stock closed up 5 percent [on Monday]. This points to the growing disconnect between what’s good for Wall Street and what’s good for Main Street... Monday underscored that, perhaps now more than ever, what’s good for GM is not necessarily what’s good for America."

Washington Post

From the Right

The right accepts that the cuts were driven by economic necessity, and argues that potential government intervention would be harmful for workers in the long run.

The right accepts that the cuts were driven by economic necessity, and argues that potential government intervention would be harmful for workers in the long run.

“GM is halting production at plants that make sedans including the Chevy Cruze, Impala and Volt hybrid. Americans are buying more trucks and SUVs amid lower gas prices and better fuel efficiency. Small cars make up a third of U.S. vehicle sales compared to half in 2012...

Mr. Trump thinks his trade machinations can overrule the realities of the marketplace, but he’s [wrong]... if he intervenes to make GM less competitive, Mr. Trump will merely hurt more workers.”

Wall Street Journal

“I oppose all forms of subsidies to the private sector but I am also appalled by the use of subsidies as a way for the president to get companies to do what he thinks that they should be doing... [especially after imposing] metal tariffs — punitive taxes on a major input that unquestionably increases automakers’ costs of production and thereby forcing them to hike their prices."

National Review

“You cannot subsidize your way to sustainable manufacturing jobs, as former Presidents George W. Bush and Barack Obama tried... [however] just as you cannot subsidize your way to prosperity, so you cannot tax your way to it [as Trump has done], in this case with tariffs against imports."

Washington Examiner

The politics of these closures will damage both parties... Democrats led by Barack Obama went all-in on a government bailout and politically driven bankruptcy settlement for GM in 2009, which cost American taxpayers billions of dollars... More acute, however, will be Donald Trump’s claims on economic boom times as the American auto industry sheds jobs on a well, industrial scale."

Hot Air

GM “got a bailout. Taxpayers made it possible for the company to restructure and stay in business... There is a reason for the rise of populist sentiment in America. It comes down to a sense that the game is rigged. And it is often very hard to argue that it is not."

American Spectator

to the United States. The Envision is the first car built in China for the U.S. market. Last year, Americans purchased 42,000 Envisions...

The basic architecture of the Envision is the same as the soon-to-be late Chevy Volt, which was built at the Detroit-Hamtramck Assembly plant that the company announced would close by the end of next year."


In an ideal world, government gives companies and industries zero subsidies, loans, targeted exemptions, forcible property transfers, or other products of coercion. Instead, it creates a level playing field and uses the resultant savings in money and time to make the costs of both government and consumption cheaper."


Massive cow named Knickers has been deemed too large to eat.

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