President Donald Trump took aim at General Motors Thursday morning, sending out a tweet criticizing the automaker for its shrinking US workforce and for setting up new plants in China.
“General Motors, which was once the Giant of Detroit, is now one of the smallest auto manufacturers there,” the tweet said. “They moved major plants to China, BEFORE I CAME INTO OFFICE. This was done despite the saving help given them by the USA. Now they should start moving back to America again?”
Sparking Trump’s ire may have been a Bloomberg article published Thursday, which indicated that GM now has the smallest UAW workforce of any of the Detroit Big Three automakers. GM has 46,000 unionized employees on its payroll, 1,200 less than Fiat Chrysler and a whopping 9,000 less than Ford Motor Company.
Bloomberg’s report notes that GM was once the largest private sector employer in the United States. Rising labor costs in the US have driven the company to set up new plants in Mexico and China, however, reducing the size of its American blue collar workforce.
The automaker announced last year that it would close four of its American plants as it restructured its business to focus on profit-heavy trucks, crossovers and SUVs. GM believes the automotive industry is set for a downturn and is thus looking to reduce overhead and ensure the company is running efficiently should another recession hit.
Plants GM has closed in the past year include Lordstown Assembly in Ohio and Warren Transmission in Michigan. The Detroit-Hamtramck Assembly plant will also close its doors before year’s end.
Trump’s criticisms of GM come as the automaker is locked in heated contract negotiations with the UAW. The worker’s union is hoping to secure increased wages and receive new allocated products as part of the new contract, but GM is keen to reduce its employment costs and continue down the path of streamlining its business and reducing bloat.
“GM’s focus during negotiations is to reach an agreement that builds a strong future for our employees and our business,” GM spokesman David Barnas told Bloomberg.
Forty years ago, GM was the largest private sector employer in the United States, employing over 618,000 Americans – 511,000 of which were hourly. Part of the reason its workforce was so large at the time was due to the fact that it made many parts in-house, instead of relying on suppliers.
The automaker has relied more on its foreign plants in recent years, allocating products like the new Chevrolet Blazer to Mexico and becoming the first automaker to sell a Chinese-made car in the US with the Buick Envision.
Subscribe to GM Authority for around-the-clock GM news coverage.
Comments
No loyalty to America after being bailed out. Sad.
yep, no thanks to both political parties for this, gm has jumped the shark again.
Look up “Debt for Equity”.
GM and rest of the domestics have “zero” patriotism and will use advertising to convince the general public otherwise!
GM standard PRBS answer No 1.: “We have invested over $23 Billion in US operations since 2009!”
GM standard BS answer No 2: “We have offered transfer opportunities to all our affected hourly employees!”
not sure why this is getting thumbs down. Its sadly true
@Evan: Failed businesses like: Trump Steaks, Trump Casinos, Trump airlines, Trump University. His clothes and his red hats have Made in China labels on them. That’s not fake news.
I’m Not saying GM shouldn’t have more employees in the US, I just I think it’s rich for him to call out anyone who makes money from producing goods overseas when he has benefited so much from just that.
Either way, this is just another distraction. It was just released that job growth has slowed significantly since 2018. Of course he’s blaming everyone but himself for this.
Andy, my red MAGA hat has a “Made in the USA” tag, proudly sewn-in.
Yes, it does! Andy is a troll that has never even seen MAGA hat with his own eyes. He only heard it on msnbc.
LOL, Greg!! I figured as much.
Or CNN! SHould Be called FN for fake news!! Mine has the same, as does my coffee mug and my flag, which says Trump/Bernie 2020!
The tag was made in China too.
Guess what, everyone? You’re ALL correct! 🙂
Official MAGA hats, sold for $25 through the campaign website, are made/assembled in California and sent to the distributor in Louisiana.
(https://www.businessinsider.com/inside-trump-maga-hat-factory-california-make-america-great-again-2018-8)
Maybe not surprisingly, there is some (disputed) evidence that the individual hat components are imported.
(https://www.macleans.ca/politics/washington/are-trumps-made-in-usa-hats-really-made-in-usa/)
There are also unofficial knock-off versions of the hat available through any number of US-based outlets, which I suspect are really popular since they can be had for <$10. Those are of course "Made in China", and I suspect your chances of encountering one of these cheaper hats is really good – because 'price' and 'who can tell the difference once it's on your head?'. Some knock-offs try harder than others…lol.
Can we focus on cars again, now?
Most of the cars GM builds in China are for the Chinese domestic market, it’s not like they are building cars for cheap and then selling them to America. It’s no different than Honda or Toyota building cars in America and selling them here. The concept of a global economy seems lost on many people and it’s sad.
^^^ this…
There’s a big difference between *moving* existing (North American) production to China and *creating* new production in China to almost exclusively serve an expanding Chinese/Asian market. If it was competitive and profitable to serve overseas markets with American production, it would already be in place.
“If it was competitive and profitable to serve overseas markets with American production, it would already be in place.”
Oh but it is! Not with traditional American sedan products unfortunately, but with big ticket foreign products made in America. I point to the BMW Spartanburg plant; the sole plant for the global supply of the X4, X5, X6, and X7.
It’s only ‘competitive and profitable’ to build in America if the product has a healthy margin. GM won’t ever have a healthy margin on Malibu’s, even if they stuck V8’s in them and gave them RWD. The interest would certainly spike, but nobody in the Malibu’s market could ever pay for one.
Meanwhile, the ugly BMW X4 starts at $51K, and will find a buyer without the need for a rebates or cash on the hood.
Ok, I’ll rephrase it: “Where it is competitive and profitable to serve overseas markets with American production, automakers are already doing that.” And they re-evaluate those business cases regularly.
GM already exports to the Chinese market with US-built vehicles (e.g. most Cadillacs, Camaro), just like BMW. For some vehicles, it makes sense, but the highest-volume sellers – Buicks, mainline Chevys, CT6, XT5 – are built locally with their Chinese partner, SAIC.
BMW, just like GM, builds the majority of its Chinese-market products in China with a local joint venture (BMW Brilliance), and they’ve already moved some additional SUV (X5) production there due to the tariff instability. BMW already builds more cars in China than the US (490,000 vs 370,000), and will export the new iX3 to the US from China. Both BMW factories in China are being expanded to accommodate capacity of 650,00 cars/yr., so BMW will have options for their SUV production. Recent developments will add pressure to localize production (or at least assembly) and move it out of the US. Daimler-Benz will be feeling the same pressure.
Um, hold on. The Buick Envison, and the Cadillac CT6 Hybrid were both being built over there and being exported back to America… and these were recent decisions. Don’t you think this was mostly a test by GM to see if they can start building different models over there and sending them here?
I understand your point about Toyota and Honda, but its a completely different scenario when GM starts claiming they’re the American brand while outsourcing parts and Labor to Mexico and China. Seriously, why build volume trucks in Mexico and claim to be American? How is it that Ford completely builds all of their F150’s in America but somehow GM builds more than half of its Crewcab and Denali trucks in Mexico??? Don’t tell me because it’s about profits, Ford has been the best selling trucks for a while now.
Had the Envision and CT6 hybrid been significant sales successes, it’s logical to assume that GM would have looked at realigning North American capacity to accommodate them. The CT6 hybrid for N.A. was already cancelled, and the Envision has only sold 30-40,000 units in N.A. vs. the >200,000 sold in China.
The Envision’s nearest platform mates are Equinox/Terrain, which are comparatively strong sellers. Evidently, it doesn’t make sense for GM to hobble North American Equinox/Terrain capacity and further complicate the related supply chains when everything’s established in China.
Toyota and Honda are Japanese companies, that sell ‘Japanese cars’ despite being assembled in the US (or Canada/Mexico), with parts being sourced from Japan, China, Mexico, and other parts unknown. GM and Ford are American companies, that sell ‘American cars/trucks’ despite being assembled in Mexico (or Canada), with parts being sourced from Japan, China, Mexico, and other parts unknown. Like any multi-national, the auto companies do what’s best for their bottom line, on a global scale. If a Chinese car company decides to expand to North America, they might assemble in the US, too.
Exactly.
With everyone and their families buying Asian n Euro everything plus a hostile market against not only American vehicles but American anything (remember Zenith, Motorola, Tandy…?) can you blame GM for outsourcing?.
Also you have other factors along with hostile market, we have automation and outside suppliers.
Now I’m not with shutting US plants but GM is alive with a black balance sheet and after that BK debacle GM knows there’s no 2nd chance. BTW you notice the rapid expansion of GM in S/A and Asia, any smart company these days won’t have all their eggs in one basket.
Anybody who seriously thought that the president could stop globalization is an idiot. You cannot stop economic progress. I am pretty sure that, had we had modern technology in the 1800s there would be a huge outcry from British that all of their great paying jobs were moving to “the colonies”. Everyone pat yourself on the back. You have lived long enough to see the economic cycle move again, this time from here to somewhere else where it is cheaper and easier to establish operations. In another fifty (50) or so years we will be watching the manufacturing leaving where it is now and going elsewhere. Our economy has matured into providing tertiary and quaternary products and services. Apple designs and perfects the product and some meager earners in Zambia turn them out.
If you want the manufacturing jobs back you need to cut your salaries by about 50% (or more). Further, do not blame GM or any other manufacturer. You want everything at dollar store prices. When you are ready to pay what a tube of toothpaste should be then we will see more jobs. On that note, there are a lot of companies that would love to have all of their production in the domestic marketplace, but retailers will not allow it. Walmart goes to its suppliers and say how much they will pay and most of the time it is a lot less than local manufacturers can afford.
We should also note that right now America is not a wasteland of manufacturing. The fact is that there is more manufacturing going on now in the U.S. than there was in the “heyday” and golden age of auto industry. It is all being done by machines. Anybody who knows anything about manufacturing knows that even if all the manufacturing came back here the increase of jobs would still be negligible. My dad saw it decades ago when he worked in a mill. When he started with the company he had a crew of about 12. By the time he retired, he had an assistant. They produced more, had less wastage, and made more money. When he retired his assistant fill his shoes and did not get an assistant.
Welcome to the modern world.
apparently trump is an idiot because less than a week ago, he ordered all US companies to leave china. that would’ve brought globalization to its knees.
@Tim Kroeker:
Very well said and articulate. I find my self in the “middle” with most comments here on this subject, but your post is well written and spot on.
This situation is much more complex than some would like to make it. Globalist has the biggest part here correct.
The other part of the problem is that while many bash American companies for doing as they are doing the people refuse to pay the prices it cost to make all things here. Everyone complains about China but yet we still go to Costco. It will not work that way.
No one wants to work for less here but they refuse to pay more for product that are made here. This is a major conflict and is why companies operate on a global scale anymore.
As for GM failing it is more about poor managment for decades in the past than where things are made. Even then there is much more to that too that one post could never cover.
and it’s hard to believe that this is from the same GM that gave us the Cadillac Fleetwood, that was a beautiful full size car back in the 50’s to the 90’s, one of the greatest in automotive history.
Many can state the higher prices for products that are made here, but the glaring problem with the argument as it relates to GM is that the company continues making the majority of their high volume SUVs (Equinox, Terrain, Blazer, Trax, Encore, Envision (I’m reaching on this one I know)) outside of the US. Making hand-over-fist in revenue and offering questionable standard features for the price.
It could be argued that if these were made in the US, their prices would be justified but their current prices aren’t. They may go up in price, or they could stay the same if GM accepted a lower margin. Toyota and Honda have their vehicles assembled in the US with competitive pricing for the same vehicle class that GM has assembled outside of the US. So in the eyes of many it is borderline inexcusable.
Mexico – Equinox, Terrain, Blazer, Trax
China/Korea – Encore/Encore GX, Envision
Note that Honda enjoys a lower paid work force many time non union. Also they are in newer plants that take less employees.
Finally if you note most have hired only younger workers to avoid retirement cost and high healthcare cost.
The American companies have a different set of obstacles to deal with that the younger and new companies don’t face.
The many web CEO experts tend to either not know or leave out all the facts involved.
DHAM and Baltimore were newer plants
We should be upset that all German and Japanese U.S. transplants are all non Union. At the same time, all of these import brands also have massive factories in Mexico.
To be fair, both Japan and Germany should allow GM to build an operate non union factories within Japan and Germany!
why should we be upset that german/japanese us plants are non-union? the people working there can unionize but they choose not to.
and do you think the only thing stopping gm from going into japan/germany is union labor? gm just unloaded opel for crying out loud.
The first thing to note is that setting up a union in a plant and start fighting for higher wages and better working conditions is not so easy in the US: the US state has set up big hurdles against this. There has to be a majority vote before the union can begin recruiting in the first place.
And then the workers are being hit by a full tsunami of anti-union propaganda and outright mainpulation and police action and what have you.
It is exactly those political forces which Trump relies on which are dead set against unionization. Look at the woman who was Trump’s voice in the UN Security Council and who was the governor of the state where BMW has their large plant (Tennessee, I believe). “Our state must be union free” she proclaimed.
VW was in favor of having a union or something like the German class-collaboratoinist shop floor council (Betriebsrat), but the political forces in the state waged a heavy handed campaign against the workers organizing themselves.
And please note that this is all in the former slave states, where Radical Reconstruction was deafeted militarily after the Civil War which accidentally ended the chattel slavery.
“To be fair, both Japan and Germany should allow GM to build an operate non union factories within Japan and Germany!”
That would be fair. There’s only one problem.
While the world has forgiven German and Japan for the 1940’s, the world hasn’t completely forgiven Detroit for the 1970’s.
American automakers would have to offer cars that Germans and Japanese consumers would want and expect. Simply offering copies of their American product range isn’t enough.
The Japanese have a protected home market, it has been that way since after WW2, no way that is going to happen.
You want the German government return to fascism and outlaw trade unions and workers organizing themselves independently?
That tells a lot about Trump’s followers.
Trump’s tariff policies are changing globalization. They highlight the risk of exporting goods in high volumes, for all companies around the world. Where possible it now makes more sense (than it did before) to manufacture products for a country, in that country, when the volumes support it.
What does this mean for USA? Well USA doesn’t want low paid jobs and won’t pay prices for goods that justify higher prices for products. So for many products there will be little difference, they may just get manufactured in a different offshore country, like Vietnam instead of China.
But for many offshore owned companies, further investment in USA, for exporting to other countries, is unlikely to happen, because they will relocate volume production into the end-market.
For example BMW and Daimler are manufacture large volumes in USA and export large volumes from USA to China. They also manufacture products in other countries for export into USA. They are now getting tariffed on both, while also being constantly criticized by Trump. Will they expand US manufacturing? That depends on which products sell in high volumes in USA. Production for those cars exported to China is likely to be moved into China as soon as they are able to, costing US jobs.
GM is very well managed. Their manufacturing volumes are already well-aligned to end-market demand. Where tariffs hurt them most is parts and components. They are also at risk of China encouraging its people to avoid US companies or Trump actually forcing them and other US companies to divest Chinese investments at what would be fire-sale prices.
GM’s management is piss poor. If Ford and FCA cam increase production and jobs with US labor and build new plants why can’t GM?
Please provide an example of “piss poor”.
Facts would be helpful in your example. 😉
A clueless CEO aside, let me count the ways:
1) Lost market share
2) Abandonment of Europe and selling operations to PSA that are making a cash cow out of the division
3) A seemingly restructuring of the month for Cadillac with still no clear direction
4) A relentless pursuit of cost cutting that gives us cheap interiors that are slammed by the press
5) Failure to read market trends that showed a shift from cars to CUVs, SUVs, and trucks- a trend read by FCA four years ago
6) Putting the company at war with its unions and the government
7) Laying off thousands of engineers and designers
8) Wasting billions on Voltec technology and the Omega platform only to let them die on the vine
9) Major holes in the product lineup including a BOF SUV like the Bronco and Wrangler
10) Using massive tax savings to buy back stock and artificially prop up stock prices instead of reinvesting in new product
11) The lackluster redesign of the Camaro
12) Spending hundreds of millions of dollars on plants (like Oshawa) only to close them two years later.
13) Spending billions on technology that very few people want (AVs) while letting the core product suffer. The person who is looking to purchase a vehicle today could care less about what is coming down the pike 20 years from now and is not too happy to pay extra for a vehicle and get less value to fund it.
Like many of your facts wrong again. Baltimore was 1935.
While DHAM is newer it was a mistake from the start. It was d deigned to be more automated by old GM and it just never worked. Right now they just got stuck with sedans no one wants. They could come back if the Union works with them at some point.
The big trouble is GM still has more production capacity than needed. Some plants just have to go. Union deals, plants locations and efficiency will all come into play.
The reality in the real world is businesses make product and produce profits. The side effect is employment. It is cold and harsh but that is how it works.
The only things certain in life is birth, taxes and death. Employment for life or guaranteed pay and happiness is not a human right. Everyone is given opportunities and it is what you make of them.
YOUR facts are wrong:
https://media.gm.com/media/us/en/gm/company_info/facilities/powertrain/baltimore.html
So, to clarify…
GM Baltimore Assembly (Broening Highway General Motors Plant) – opened 1935, closed in 2005
GM Baltimore Powertrain (GMBP) – opened in 2000, closed in 2019
C8.R
GM’s problem isn’t that they have more production capacity than they need. Their problem is that they continue to build half-baked products that aren’t competitive in the marketplace. Thus, they don’t sell. Thus, they don’t need to build very many of them.
At one time, when GM was lead by competent people and was an industry leader, they needed every plant they had to meet the high demand for their products. The root cause of the overcapacity today is that GM builds mediocre products and in every niche, there’s a better option.
GM’s new pickups likely aren’t going to need the plant capacity they have. Why? They aren’t competitive and represent another lackluster effort from General Motors.
Mary Barra prances out onto a stage and announces more plant closures to ‘align capacity’. She does the same thing GM’s previous CEOs have done. They’ve all believed they could shrink GM to profitability. I would submit that the better approach is to cut the designers loose, hire more engineers, and keep them on a test track night and day with a renewed and relentless commitment to do what GM once did; lead the industry with the absolute best cars and trucks to be found. If they’d do that, I suspect the overcapacity issue would vanish.
In the 1980s, Ford was nearly out of business and had the same ‘overcapacity’ problem. When their back was against the wall, they built the 1986 Ford Taurus and Mercury Sable. They were shockingly new and good. Buyers were infatuated and Ford’s worry quickly shifted to one of how to build enough of them to meet demand.
GM’s problem is lackluster products leading to low demand leading to plant overcapacity. Why in 40 years nobody could figure that out and fix it is a question only those inside GM could possibly know.
OMG STUPID AMERICANS!!!! DO YOU KNOW WHY GM BUILDS CARS IN CHINA??? THEY sell CARs IN CHINA !!!!
TOYOTA, Honda,Nissan Builds cars in America!!!! Mexico too, They are Japanese Corporations… It makes more sense to build Toyota Cars and Trucks here in North America for the American Market, rather than build cars and trucks in Japan and put them on boats to America. It saves a lot of money and the cars get less damage in shipping.
GM BUILDS CARS IN CHINA BECAUSE THEY SELL CARS IN CHINA!!!!! ALMOST 4,000,000 a year
Funny this coming from a bunch of people with MADE IN CHINA IPHONES!!!! Apple doesnt build phones in America, you know why????
Americans are too stupid to build them!!! In the 80’s Apple tried to set up manufacturing here in America, there just aren’t enough smart people here to build computers. It was a failure, Apple needed to find a competent workforce and turned to China. American workers are the reason most of the things We buy are made in China, American Workers are incompetent and overpaid !!!!!!! Just look at all the Hispanics doing our labor in this country, White people just do not want to work hard anymore. That is the real shame
Tom,
I wouldn’t paint with such a broad brush. There are plenty of highly intelligent and industrious Americans. However, as a more advanced society, large swaths of our people are employed in more high-tech or intelligence-focused sectors. Those who seek employment in manufacturing in America tend to be less educated and/or perhaps less diligent and are often middle-aged. Whereas in the developing countries, plenty of their youth are willing or, in some cases forced, to work hard in the manufacturing sector.
In my own family, as the generations have passed, we’ve moved from farmers, to factory workers, to professionals, and now to entrepreneurs. I think more broadly that’s what’s happened in our society. There are still folks working in manufacturing in our society but many American families have progressed to more knowledge-based sectors.
Love Trump or hate him, Trump hit the nail on the head again. He is calling out the corrupt GM brass for selling out Canada and the US for Mexico and China.
Also, we are the midst of a trade war. Globalist companies only care about profits, and the Chinese communist gov has exploited that for intellectual property theft and massively expanding their economy with our money.
I really hate to be this guy but I have a feeling every President going forward will be losing jobs each and every year.
A.I. is growing at an exponentially crazy rate.
Remember you heard it here first, watch what will happen to Port Jobs starting in 2021. It is going to be a massacre in that field within the next 10 years World wide. Almost every Job sector but especially Manufacturing will keep dwindling in numbers every single year. At a higher clip per year unfortunately.
Some economists are predicting it is coming so fast that the only thing Governments can do is Tax the living Daylights out of these Corporations going forward.
So if this will be true, makes zero difference who the President will be. Who knows what the next 10/15 years will be like.
I just hope as a GM fan they are ready for what the Future will bring and sustain or even surpass where they’re at today.
I feel like they have a decent start jumping into Mobility right away with Cruise and supposedly in future EV’s that we are still waiting for.
This is an preemptive shot across the bow and a warning to General Motors for moving too many jobs to Mexico; one never knows what Trump might do.. could add legislation to the yet to be ratified USMCA with wording that could effect whether a vehicle coming from Mexico is subject to tariff.
Why would GM care what Trump does or says? He might have 2 more years or 6 more years.
That is almost nothing in Car years. GM probably decided to build the Blazer in Mexico two to three years prior to us even seeing it.
Presidents will come and go. GM just needs to do what is best for their customers and their Company.
I would love for every part to be assembled here in the States but that will never happen. I just want a thriving GM as I am a fan of the overall Company and want to see them around for another 100 Years and then some.
It’s not just Mary. Nobody listens to Pocapornstar anymore.