Politicians in the United States and Canada have denounced automaker General Motors' announcement Monday that it would cut more than 14,000 jobs and shut down factories in North America and beyond in 2019, a transformation the company said would be profitable.
GM said in a press release that five of its assembly and propulsion plants in the United States and Canada would be "unallocated" in 2019. It also plans to lay off 15 percent of its salaried workers, which would trim down the number of its executive ranks by 25 percent.
The cuts amount to more than 14,000 jobs in total, including some 8,100 white-collar positions as well as over 6,000 factory jobs. In addition to a previously announced factory closure in South Korea, the company also said it would cease operations of another two overseas plants by the end of 2019, the specificity of which it didn't disclose.
"Contributing to the cash savings of approximately 6 billion dollars are cost reductions of 4.5 billion dollars and a lower capital expenditure annual run rate of almost 1.5 billion dollars," GM said of its restructuring in the statement.
However, the automaker's decisions triggered denouncement in both political circles and the business community across the United States and Canada. U.S. President Donald Trump told reporters Monday at the White House lawn that he was "not happy" with the plans.
GM Chief Executive Officer Mary Barra had given notice to U.S. officials before the formal announcement was made, according to media reports.
"You know, the United States saved General Motors. For her (Barra) to take that company out of Ohio is not good. I think she is going to put something back in soon," Trump said. He was referring to the 2008 government bailout that saved GM from bankruptcy.
Barra said in the statement carried by her company that the measures will continue to make GM "highly agile, resilient and profitable, while giving us the flexibility to invest in the future." She also talked with top White House economic adviser Larry Kudlow on Monday in a pre-arranged meeting, on which the company declined to comment.
"I was very tough," Trump said. "I spoke with her (Barra) when I heard they were closing and I said, you know, this country has done a lot for General Motors."
Canadian Prime Minister Justin Trudeau said he spoke with Barra to express his "deep disappointment" over GM closing its assembly facility in Oshawa, Ontario. He added that the Canadian government will do what it can to help laid-off GM workers in Oshawa "get back on their feet."
The Canadian government granted GM 10.8 billion Canadian dollars in loans (about 8.1 billion U.S. dollars) in 2009 to keep the company afloat, provided that it would not reduce its manufacturing operations in Canada over 6 years.
Last week, Ottawa gave corporations including GM a tax giveaway of 14 billion Canadian dollars (approximately 10.5 billion U.S. dollars) to guarantee jobs remain in Canada.
In its statement GM refrained from the outright use of words like closure or shutdown, opting for "unallocated" instead. The company's spokeswoman Stephanie Rice said abandoning production facilities may involve negotiations with United Automobile Workers (UAW), a powerful labor union representing workers in the United States and Canada.
"GM's production decisions, in light of employee concessions during the economic downturn and a taxpayer bailout from bankruptcy, puts profits before the working families of this country whose personal sacrifices stood with GM during those dark days," Terry Dittes, UAW vice president and director of the GM department, said in a statement, adding the potential moves are "a slap on the face" to the government bailout.
The job cuts and factory shutdown also provoked repercussion in the U.S. Congress on Monday, as lawmakers across the aisle expressed frustration over the decision.
"The workers at Lordstown are the best at what they do, and it's clear once again that GM doesn't respect them," said Senator Sherrod Brown, a Democrat from Ohio, referring to GM's Lordstown Assembly in Warren, Ohio. "Ohio taxpayers rescued GM, and it's shameful that the company is now abandoning the Mahoning Valley and laying off workers right before the holidays," he added.
"I am deeply frustrated with General Motors' decision to shut down its Lordstown assembly plant and disappointed with how the hardworking employees there have been treated throughout this process," Republican Senator Rob Portman, also from Ohio, said.
Portman said he urged Barra "in a frank conversation" to consider production of other vehicles at the Lordstown plant now that GM planned to cease production of its Chevrolet Cruze model.
"During today's conversation, I pressed GM again to provide new opportunities to the Lordstown workers and take advantage of the skilled workforce there," Portman added.
