Presidential candidate Donald Trump promised a lot of things to his supporters while campaigning back in 2016. One of them was to protect manufacturing jobs, especially in the automobile sector. In Detroit and Lordstown, Ohio, General Motors (GM) employed a large number of Americans in their manufacturing plants. After gaining a seat in the Oval office, trump even offered subsidies to GM after they incurred vast amount of loses – in hope of keeping their manufacturing plants open. However, GM announced on 26th November, 2016 that it would close three North American car plants – the two in Lordstown and Detroit – and one in Oshawa, Ontario, along with two additional facilities in Warren, Michigan, and Baltimore, Maryland.
The vast majority of blue-collar workers employed by GM received the news a day after Thanksgiving weekend, which obviously fouled the mood. The decision would render around 14,700 blue-collar employees jobless. GM also announced that it would reduce its North American white-collar workforce by about 8,000. The decision was taken due to the drop in sales of GM automobiles – especially the Chevrolet Volt and Impala, the Cadillac CT6 and the Buick LaCrosse. The company CEO, Mary Barra, hopes that by closing the manufacturing units of GM in these cities, the company would save $6 billion by the end of 2020.
The news outraged Trump, who criticized Barra for her decision. Trump tweeted that GM’s decision was reckless as they didn’t consider the bailout that the U.S. government offered them a few years ago. He threatened that if GM actually closes the plants, he would cut their annual subsidies instead. Of course, Trump is more concerned about the fact that GM’s decision would turn voters against him, as these cities are primarily Republican.
GM states that it was Donald Trump’s tariffs on steel and aluminum that resulted in the shutdown of the manufacturing plants. An increase in steel resulted in an increase in car prices – which ultimately dropped down their sales. In fact, GM previously raised the issue when Trump was in the process of implementing the tariffs. However, Trump’s ability to only look at an issue from one angle forced him to overlook GM’s warnings.
While the manufacturing plants are being poised to close, most of the U.S.-based production workers will have a chance to relocate to another GM plant. GM’s heavy-duty truck plant in Flint will be ramping up production and will need workers. Also, GM’s Arlington, Texas, plant where it builds its full-size SUVs, is ramping up to build the next-generation Chevrolet Tahoe, Chevrolet Suburban, Suburban XL and GMC Yukon.
Nonetheless, experts indicate that many more automobile companies will follow suit and will be forced to close their manufacturing units as well. While Trump promised more automobile manufacturing jobs to Americans, his tariffs have now resulted in the plants to shut down. As the 2020 Presidential election inches closer, the prospect of Trump supporters losing their jobs will not bode well with the President of the United States.