Lawmakers Criticize General Motors After Closure Announcements

General Motors

General Motors Co. (NYSE: GM) made the surprise announcement on Monday that it would be cutting its workforce by up to 15%. In addition, the auto manufacturer will close plants in the United States and overseas. The company will also cut unpopular vehicle models from its lineup in the U.S.

While investors reacted well to the news, with stock prices increasing 4.79% at the close of the market yesterday, lawmakers were less than pleased. Members of Congress had harsh words of criticism, and even the President was unsympathetic for the iconic American company.

Lawmaker Claims GM Doesn’t Respect Its Workers

Senator Sherrod Brown of Ohio said on Monday that “The workers at Lordstown are the best at what they do, and it’s clear once again that General Motors doesn’t respect them. 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.”

GM’s Lordstown assembly plant opened in 1966 and has most recently produced the Chevrolet Cruze compact sedan. It will be the main closure and source of layoffs in the U.S.

Senator Rob Portman of Ohio was also highly critical of GM, saying that he was “deeply frustrated” by the decision to shut down the plant. The Republican Senator said that he has “pressed General Motors again to provide new opportunities to the Lordstown workers and take advantage of the skilled workforce there.”

President Trump Calls on General Motors to Open a New Plant

The President himself even weighed in on the situation, telling reporters on Monday that he was not happy with GM leadership and that he had urged the company to pull production from China and instead open a new plant in Ohio.

While the government has been highly critical of General Motors this week, the reality is that the decision to cut jobs and production has already been made. CEO Mary Barra said on Monday that “These actions will increase the long-term profit and cash generation potential of the company.” Judging by the response on the stock market, the investors agree with her.

To the detriment of America’s blue-collar workers, General Motors is now expected to increase free cash flow by $6 billion within the next year. Plant closures and layoffs are expected to save the company $4.5 billion over the same period.

 

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The reports, research and newsletter are based on current and historical market data, as well as publicly available financial data.They are intended to be a starting point for investors. They do not provide every material fact about a company or industry, nor are they recommendations to buy or sell. The writers and the company make no warranties or representations as to the accuracy of these reports.   You should NOT rely solely upon the information or opinions read in the content. Rather, you should use the content as a starting point for doing independent research on the independent analysis and trading methods in the content. The content is impersonal and does not provide individualized advice or recommendations for any specific reader or individual portfolio. By accessing this website you have agreed to our disclaimers and privacy policy.

 

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