General Motors (GM) may have delivered net income of close to $2.5 billion (€2.2 billion) in the third quarter of 2018 and be on a sound financial footing, but the company's intention to cease operations in three Midwestern states and the Canadian province of Ontario has been met with disdain by the USA president.
Rivals Ford Motor Co and Fiat Chrysler Automobiles NV have both curtailed US vehicle production.
GM shares rose as much as 7.8 per cent following the announcement, and were almost 6 per cent higher at $37.97 in mid-afternoon trading. "We've done this to help you and I think his disappointment is, it seems like that they kind of turned his back on him". Fiat Chrysler Automobiles got out of small and midsize cars two years ago, while Ford announced plans to shed all cars but the Mustang sports vehicle in the USA in the coming years.
Its North American salaried workforce, including engineers and executives, will shrink by 15 percent, or about 8,000 jobs. General Motors will lay off thousands of factory and white-collar workers in North America and put five plants up for possible closure as it restructures to cut costs and focus more on autonomous and electric vehicles.
GM on Monday announced it would cut six gas-powered auto models as part of a plan to close factories and cut costs so it can spend more on electric and autonomous vehicle development.
The company will also stop making the models assembled at those plants - the Chevy Cruze, Cadillac CT6, and the Buick LaCrosse. But Bob Lutz, GM's former vice-chairman, said the company was facing "hard facts".
At the factories, around 3,300 blue-collar workers could lose jobs in Canada and another 2,600 in the US, but some USA workers could transfer to truck or SUV factories that are increasing production.
Trump said he expected General Motors to start manufacturing another type of auto in OH and that it "had better" do so. The UAW's large-scale contract with GM expires next year and negotiations will begin soon.
Trump has long promised to return manufacturing jobs to the United States and particularly the Midwest. The company has said tariffs on imported steel, imposed earlier this year by the Trump administration, have cost it US$1 billion.
"We started this transformation in 2015", Barra said in a conference call with reporters to announce the moves, "Now we're accelerating and picking up the pace".
Alongside two plants in MI, one in Maryland, and one in Ontario, Canada, GM said one of the plants targeted to be closed-or, um, "unallocated" in the bad PR-jargon used by GM in the announcement-is just outside of Youngstown, Ohio.
Barra said the automaker is running at about 70 percent capacity utilisation in North America, and the company will provide an update on how the latest moves will improve utilisation in January.
The president also threated the company in the continuation of his tweet.
"The president wants to see American companies build cars here in America not build them overseas, and he is hopeful that GM will continue to do that here", she said. Some displaced GM vehicle plant workers could find jobs at truck factories, GM officials said. GM has several plants running well below that. "And I said, because their Cruze auto isn't selling, OK?"
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Trump said he expected General Motors to start manufacturing another type of auto in OH and that it "had better" do so. Two transmission plants - one in White Marsh, Md., and another in Warren, Mich. - are also set to stop production.