GM Job Cuts, Plant Closures Betray Workers, Contracts
When GOP President Donald Trump and Congress’ ruling Republicans jammed through the $1.2 trillion tax cut for corporations and the rich almost exactly a year ago, they promised it would put money in taxpayers’ pockets while prompting firms – with the money they would get -- to create or repatriate thousands of new U.S. jobs.
“At last, our country finally has a tax system that is pro-jobs, pro-worker, pro-family, and pro-American,” Trump said in late July, celebrating the 6-month anniversary of his tax cut.
Somebody tell that to the unionized workers at General Motors. They got hit, on Nov. 26, with firings at five U.S. plants, plus a big one in Oshawa, Ont. At least 5,600 workers will be let go, most of them in the U.S., but also including 2,500 in Oshawa. So will another 7,000 middle managers and white-collar non-union workers. GM set no timetable for the firings.
GM’s decision drew outrage from the Auto Workers, who represent those unionized employees, along with Sen. Sherrod Brown and Rep. Marcy Kaptur, both D-Ohio. The first of the five U.S. plants reportedly to close, costing 1,600 workers their jobs, is in Lordstown, Ohio.
The Oshawa workers didn’t wait around to see who would get canned or when, especially since Canadians didn’t benefit from Trump’s tax cut, though GM did. The Oshawa workers put down their tools and walked off the production line at 9 am Eastern time, when the news came through. Their president said GM plays by its own rules, so his union can, too.
GM decided to close the auto production plants in Oshawa, Lordstown and Hamtramck, Mich. (1,500 jobs). It’s also closing a propulsion plant in Baltimore and transmission plants in Brownstown and Warren. Mich. Job cuts for those three were unavailable.
CEO Mary Barra said GM needed to close those plants as it shifts more towards hiring highly skilled workers to produce electric and self-driving vehicles. But other workers, in Mexico and China, will make gasoline-powered autos the plants now produce for the U.S. market. Those models – including the Chevy Blazer and the Cadillac GT6 – will be discontinued here at the end of 2019, Barra said.
And Barra said the closures will save GM $6 billion by 2020, three-fourths of it in capital spending. That also defies Trump’s prediction his tax cut would prompt more capital spending by firms. Trump, in a White House meeting, rebuked Barra face to face.
But it’s her $6 billion savings forecast that pissed off the UAW.
GM’s move “will not go unchallenged…The UAW and our members will confront this decision by GM through every legal, contractual and collective bargaining avenue open to our membership,” the union said.
“This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce,” Terry Dittes, the union vice president and director of its GM department, said in the UAW statement.
“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. These decisions are a slap in the face to the memory and recall of that historical American made bailout.”
“We must step away from the anti-worker thinking of seeking simply the lowest labor cost on the planet,” union President Gary Jones added in the statement. “The practice of circumventing American labor in favor of moving production to nations that tolerate wages less than half of what our American brothers and sisters make, must stop. More importantly, we must understand these companies, including GM, are no longer in trouble. They are recording annual profits in the tens of billions.”
Brown and particularly Kaptur linked the GOP tax cuts, Trump’s “new NAFTA” pact and GM’s move together.
“GM gained record tax breaks from the GOP's tax scam—and chose not to invest that money in American workers. As a result of that corporate greed, thousands of workers will soon be out of a job. Disgraceful,” Brown tweeted.
Kaptur called GM’s firings and closings “an affront to” repeated sacrifices by workers and taxpayers to GM. “For too long a rigged economic system highlighted by bad trade deals such as NAFTA and a tax system that incentivizes offshoring stacked the deck of corporate power against the American worker,” added Kaptur, one of the few remaining lawmakers who lobbied against and voted against NAFTA 25 years ago. “This administration promised an end to it and has dragged its feet while more jobs hang in the balance. Enough is enough.”
“Our effort to rescue the American auto industry secured automotive manufacturing even as some in Congress were willing to keep shipping it offshore. To keep good jobs here in the U.S., we need a just and accountable tax policy and we need to jettison trade deals that only serve to undermine a fair playing field for all workers,” she concluded.
Oshawa’s retiring mayor, John Henry, had heard increasing rumors of the closure the day before and drove to the plant late that afternoon. “Utterly heartbroken,” he stayed there most of the day and into the night, since, as he put it in a tweet, everybody in Oshawa works at the plant or has a father, mother, sister, brother, aunt, uncle or family friend who does.
“I know many of our families will get little sleep tonight,” he tweeted on Sunday evening,
Nov. 25. “That includes members of my family. No one in Oshawa or our…Greater Toronto region is unaffected by these reports and the devastating announcement we hear is coming tomorrow morning.”
Unifor told the Canadian Press it learned no cars will be assembled in Oshawa after December 2019. Unifor President Jerry Dias plans to meet Jones in D.C. to talk strategy.
"Based on commitments made during 2016 contract negotiations, Unifor does not accept this announcement and is immediately calling on GM to live up to the spirit of that agreement," Unifor’s statement read. The two sides start bargaining a new pact in 2020.
The $6 billion in savings from the closures Barra disclosed is on top of the windfall GM got from the Trump-GOP tax cut. Bloomberg-Bureau of National Affairs hired independent tax consultants who calculated GM alone reaped $330 million in just the first quarter of this year from the tax cut. But they also determined GM would lose more -- $493 million in that quarter -- from paying Trump’s tariffs on imported steel, aluminum and cars from Canada.
And in lobbying for the tax cut, GM CEO Barra didn’t promise to create any new jobs. “We’re very supportive of tax reform, and generally the bills before Congress move in the right direction,” she told the Washington Post at the time lawmakers debated it.
UAW has another idea for countering the closures: It told consumers how to identify U.S.-made GM cars.
“Examination of the driver-side window near the dashboard displays the Vehicle Identification Number plate (VIN) that identifies where the vehicle was assembled. VIN numbers beginning with ‘1’, ‘4’ or ‘5’ were assembled in the U.S., ‘2’ were assembled in Canada, ‘3’ were assembled in Mexico. If it begins with the letters J-R, it was assembled in Asia.”
“Join the UAW in this effort in saying ‘No’ to American companies that choose foreign workers over American workers and imported products over U.S.-made products,” the union urged.
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