GM to start laying off 4,000 salaried workers on Monday
Layoffs for about 4,000 salaried staff at General Motors are due to start Monday — a previously announced move that comes just as President Donald Trump prepares to trumpet American manufacturing at next week’s State of the Union address.
The layoffs are part of a 15% reduction in white collar jobs in North America that the automaker first announced back in November. At the same time, it announced plans to close four US plants as well as a fifth in Canada.
The job cuts and plant closings are part of ongoing cost reductions to free up $6 billion annually to invest in a new generation of autos, such as electric and self-driving vehicles. It is also making a push to develop a ride hailing service that will allow GM to make more money by selling rides to customers rather than vehicles.
But the move enraged Trump, who repeatedly lambasted GM CEO Mary Barra over the decision. In his rebuke of GM, Trump focused on the closures in Ohio, a state he won in the 2016 election. The company also announced plans to shutter facilities in Maryland and Michigan.
He said the company would face punishment for the closures, which included a plant in Lordstown, Ohio, that Trump personally promised to revive during the 2016 campaign.
The president said he was “very tough” on Barra in a phone call after the company announced the closures, and referred to the federal auto bailout money the company received in 2008.
“You know, the United States saved General Motors, and for her to take that company out of Ohio is not good,” Trump said in November.
He commiserated about the closures in a series of phone calls with his Canadian counterpart Justin Trudeau. And he claimed GM would soon announce steps that could counteract the effect of the plant closures, though what those actions are remain unclear.
Trump is due to tout his economic successes on Tuesday during the annual State of the Union address to Congress. A senior administration official said Friday the speech’s theme would be “Choosing greatness.”
Overall, Trump is presiding over a strong American economy. Friday’s job report beat expectations, showing more than 300,000 jobs were created last month. But trade tensions and global economic anxiety have led some companies to rethink their business plans and sparked concerns about the risk of a slowdown.
The GM plants, which include about 6,000 hourly jobs, have yet to close, GM is moving ahead with the salaried staff reductions, a GM spokesman confirmed Friday. The timing of the layoffs was first reported by the Detroit News.
The company had about 2,300 salaried staff accept voluntary buyout packages that were offered to 18,000 employees. In addition, there were 1,500 contract employees who were not retained by the company.
That leaves the remainder of the 8,000 planned job cuts to be accomplished with the involuntary layoffs.
GM (GM) is due to report financial results Wednesday and it is expected to report lower earnings.