Washington: General Motors Co.’s (GM’s) plan to cancel production at US factories and cut thousands of jobs drew a swift rebuke in the industrial heartland where US President Donald Trump posted surprising electoral wins premised on his pledge to restore manufacturing. Members of both parties criticized the move announced Monday, citing the government aid the company has received in recent years, from the 2009 federal bailout of the auto industry to the $1.5 trillion tax cut that became law last December.
“The company reaped a massive tax break from last year’s GOP tax bill and failed to invest that money in American jobs," Democratic Senator Sherrod Brown tweeted, calling GM’s move “corporate greed at its worst".
GM said on Monday that it would cease production at vehicle assembly plants in Ohio, Michigan and Ontario, Canada, by the end of next year as part of a restructuring plan the company expects will include shedding some 14,000 salaried and factory workers. The plan also will end work at plants that make transmissions and other components in Maryland and Michigan.
Trump ran for the White House on a pledge to revitalize beleaguered industrial communities across America, promising more jobs and more factories. In a 2017 rally in Youngstown, Ohio, near one of the factories GM announced it would shutter, Trump said “after years and years of sending our jobs and wealth to other countries, we are finally standing up for our workers and for our companies".
Trump’s victories in Ohio and Michigan helped seal his electoral vote total and the US presidency. Trumbull County, Ohio, where the village of Lordstown is located, backed him with 51% of the vote after four years earlier giving Barack Obama 60% of the vote.
The White House didn’t immediately respond to a request for comment on GM’s move.
Arno Hill, the mayor of Lordstown, home of the hulking factory where GM now plans to stop producing the Chevrolet Cruze small car next year, said mood in the village of about 3,000 people was “somber".
“I will say I’m not the happiest guy in town," Hill said in a phone interview. Still he added he was holding onto hope GM would use the massive facility to build a new product. “They said they were ceasing production, not shuttering."
Jim Graham, the former president of the United Automobile Workers union that covers employees at GM’s Lordstown plant, called the announcement “depressing," adding: “Hopefully we can do something."
Senator Rob Portman, a Republican from Ohio, helped shepherd through landmark corporate tax cuts last year as a senior member of the Senate Finance Committee, of which Brown is also a member.
“I am deeply frustrated with General Motors’ decision," Portman said in a statement.
The progressive group Not One Penny estimated GM’s savings from the tax plan total more than $500 million. The group opposed to the tax overhaul and said GM’s decision to close factories and cut jobs show the legislation was a failure.
“General Motors’ decision to gut its workforce epitomizes the bad corporate behavior Republicans in Congress have incentivized for generations," said spokesman Ryan Thomas. “Instead of using its massive tax savings to increase employee wages or invest in its workforce, GM is shuttering plants and cutting jobs to increase profits and further enrich shareholders."
Representative Tim Ryan, a Democrat from the district that includes the Lordstown plant, said the taxpayer bailout kept GM afloat during the recession.
“We fought together to keep GM afloat and the American taxpayers bailed them out when they were on the verge of bankruptcy," Ryan said in a statement. “Thousands of families have sacrificed to build GM into what it is today. And in return, GM has turned its back on us when we need them the most."
In 2009, GM and Chrysler filed for Chapter 11 bankruptcy reorganizations guided by the Obama administration and bankrolled in large part by taxpayers.
Steve Rattner, the head of former President Obama’s auto task force who oversaw the GM and Chrysler bailouts, said the announcement shouldn’t be construed as a violation of the bailout agreement because the industry has changed and the companies need to be able to adapt.
“No, I don’t think these violate the 2009 agreement, in part because we always made clear that GM should be free to run its business in the ordinary course," Rattner said. “It’s important for GM to be free to adjust its business accordingly."
In a statement announcing the decisions, GM said the restructuring would generate cash savings of about $6 billion that will be needed as the company races to develop autonomous vehicles and a larger portfolio of electric cars.
“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future," GM’s chief executive officer Mary Barra said in a statement.
Bloomberg’s Laura Davison contributed to this story.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.