Damage Control: GM Attempts to Smooth Things Over in Washington

Matt Posky
by Matt Posky

General Motors’ restructuring plan has placed it under heavy fire. As it turns out, domestic job cuts and factory closings aren’t all that popular on Capitol Hill or in middle America, especially when a company appears financially healthy. Go figure.

Hoping to mitigate the social damage that’s only guaranteed to escalate next year, GM CEO Mary Barra took a trip to Washington to speak for the automaker. However, there wasn’t much backpedalling or apology-making coming from the executive. Instead, Barra’s presence served only to show that the company is capable of listening while simultaneously reinforcing that there will be no changes made to the plan.

That hasn’t sat well with a president who made employment the cornerstone of his campaign, or the two Ohio senators who want GM to reallocate production from Mexico to Lordstown Assembly to avoid job losses after the Chevrolet Cruze’s discontinuation.

“I want to make sure that the workforce knows that there are limitations and we do have an overcapacity across the country,” Barra said, suggesting that staff currently employed by plants set to close consider GM jobs elsewhere. “I understand this is something that impacts the country and I understand that there is a lot of emotion and concern about it.”

However, Reuters reports that she also said it would be “very costly” to shift production of the Chevrolet Blazer from Mexico to the United States. Fortunately, Barra also claimed that General Motors plans to add products to certain U.S. facilities in 2019. It just doesn’t look as if Lordstown will be given priority. Ohio Senator Rob Portman later confirmed that the CEO made no promises about the facility, noting that Barra had explained that the plant’s ultimate status would be determined via UAW contract talks scheduled for the coming year.

“We’re not asking for charity.” he said, suggesting that all Ohio needs is a new product to sink its teeth into.

Following her meeting with Ohio Senators Sherrod Brown and the aforementioned Portman, Barra announced that GM was working with the UAW to best determine what to do with the unallocated plants and how to retrain workers facing layoffs so they can be placed elsewhere. Talks with the UAW are likely to get messy. The union already alleged that GM’s restructuring plan violates commitments it made during 2015 contract negotiations. Since then, the UAW requested that the automaker rescind its decision and resolve the fate of the facilities it plans on closing during talks for a new labor contract in 2019.

From Reuters:

Barra is in Washington for meetings with lawmakers, including Senate Democratic Leader Chuck Schumer as well as lawmakers from Ohio and Maryland. She was also expected to meet with lawmakers from Michigan on Thursday, among other meetings. After GM announced its plans, Trump threatened to eliminate subsidies for GM in retaliation.

Administration officials later said they wanted to end subsidies for electric cars in 2020 or 2021, affecting GM and other automakers.

Trump also said new auto tariffs were being studied, asserting, without evidence, that they could prevent job cuts such as those planned by GM.

In a statement released Wednesday evening, Barra said: “I had very constructive meetings with members of Congress from Ohio and Maryland. I share their concerns about the impact the actions we announced last week will have on our employees, their families and the communities.

These were very difficult decisions — decisions I take very personally. I informed the members that many hourly employees at the impacted U.S. plants will have the opportunity to work at other U.S. GM plants and that we are committed to working with them to minimize the impact on the communities. I also informed them that all salaried GM workers impacted by these actions are being offered outplacement services to help them transition to new jobs.”

Portman told the Detroit Free Press he spoke to President Donald Trump on Wednesday regarding the GM cuts and said he “is very committed to keeping this assembly plant in Ohio.” But while Senator Portman is seeking the president’s help, Senator Brown is pursuing Trump’s tactics. “The government saved this company,” he said, referring to the bailout of General Motors in 2009.

That’s been a common complaint among those displeased with GM. But Barra has tried to keep the focus on the current problem. “Where we are focused right now is on the workers,” she said, noting that the automaker invested $22 billion in its U.S. operations since the the last recession. The CEO also placed an emphasis on environmental concerns and ending the trade war with China whilst in Washington.

Some could not be diverted from the jobs issue, though. U.S. Representative-elect Elissa Slotkin (D-Holly) and Rashida Tlaib (D-Detroit) brought up questions about GM’s long-term goals and environmental concerns but wanted to remain focused on the jobs issue. Tlaib was especially critical of the company, saying that Detroit and the United States have both “paid a terribly steep price to placate and keep GM afloat. Now, as we fight to rebuild our regional economy and create living-wage jobs, GM is repaying our sacrifice and investment by slashing thousands of jobs and closing the plant an entire neighborhood was torn down to build.”

“I’ll always stand in solidarity with workers and for what’s right and this is simply wrong,” she continued, adding that the automaker’s actions reaffirmed her commitment to making demands of corporations that receive public subsidies upfront.

[Images: General Motors]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • MaintenanceCosts It's going to have to go downmarket a bit not to step on the Land Cruiser's toes.
  • Lorenzo Since EVs don't come in for oil changes, their owners don't have their tires rotated regularly, something the dealers would have done. That's the biggest reason they need to buy a new set of tires sooner, not that EVs wear out tires appreciably faster.
  • THX1136 Always liked the Mustang though I've never owned one. I remember my 13 yo self grabbing some Ford literature that Oct which included the brochure for the Mustang. Using my youthful imagination I traced the 'centerfold' photo of the car AND extending the roof line back to turn it into a small wagon version. At the time I thought it would be a cool variant to offer. What was I thinking?!
  • GregLocock That's a bodge, not a solution. Your diff now has bits of broken off metal floating around in it.
  • The Oracle Well, we’re 3-4 years in with the Telluride and right around the time the long term durability issues start to really take hold. This is sad.
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