Barra explains GM restructuring plans to lawmakers




Mary Barra on Capitol Hill: “A strong GM is the best way for me to maintain the 90,000-plus jobs we have across the U.S., in addition to all the people who have retired from GM and their pensions.” Photo credit: REUTERS

UPDATED: 12/5/18 8:47 pm ET – adds GM statement

WASHINGTON — Ohio senators Sherrod Brown and Robert Portman urged General Motors CEO Mary Barra to accelerate contract talks with union officials and decisions on where to build new products so the state’s Lordstown plant can continue operating.

Barra, meeting lawmakers Wednesday on Capitol Hill, said the company was focused on finding transfer and retraining opportunities for some of the 6,000 workers impacted by last week’s decision to discontinue making several slow-selling models such as the Chevrolet Volt plug-in hybrid sedan.

The GM chief deflected criticism that the company owes it to workers to keep them employed after accepting a multi-billion rescue package from the federal government a decade ago.

“We will be forever grateful for the assistance the U.S. government provided GM, but we are trying to make sure we’re good corporate citizens and continue to provide jobs and transportation that customers want in this country,” Barra told reporters after emerging from a meeting with the senators. “That’s the most responsible thing we can do to thank the American taxpayers,” she said, adding that GM has invested $22 billion in the U.S. since 2009.

The automaker is restructuring to focus more resources on electric and automated vehicles, and mobility services, in response to market signals that customers are losing interest in sedans and looking at alternatives to traditional car ownership. Barra said keeping GM viable in a period of industry turmoil would provide the greatest security for GM workers.

“A strong GM is the best way for me to maintain the 90,000-plus jobs we have across the U.S., in addition to all the people who have retired from GM and their pensions,” she said.

The Lordstown plant, which makes the Chevy Cruze, is one of two assembly plants in the U.S. on the chopping block, along with two parts plants and another assembly plant in Oshawa, Ontario. Lawmakers have expressed outrage over GM’s surprise decision, saying taxpayers and workers stood with GM during its time of need and deserve a chance to make the new product lines.

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The UAW, which represents the workers at GM’s U.S. plants, on Monday formally objected to the company’s decision. The GM-UAW contract expires in September. 

Political implications

Brown, a Democrat who won recently won re-election in an increasingly red state, and Portman, a Republican, said GM should retool the plant and build an electric model there or move production of the Chevy Blazer SUV, or another product, from Mexico.

“GM says it expects to build 20 new EVs in next five years. We want one or more of those vehicles to be built in Lordstown, Ohio. That’s where it belongs,” Portman said.

The senator said he spoke Wednesday with President Donald Trump, Labor Secretary Alexander Acosta and Ohio Gov.-elect Michael DeWine as the senators work with all levels of government to keep the plant operating.

Last January’s tax bill, which lowered corporate tax rates to 21 percent and saved GM about $140 million, makes the U.S. more globally competitive and should serve as an incentive for companies such as GM to reinvest in domestic production, the senators said. Portman noted that the bill also gives companies the ability to immediately write-off capital investments, versus the traditional method of claiming annual depreciation.

“So, the tax bill is exactly the kind of thing GM should be using to reinvest in Lordstown for its new product. We understand the Cruze isn’t selling like it used to. But that plant also deserves the support of this company that has supported it so well over the last five decades,” Portman said.

Other cuts

GM is also trimming more than 8,000 salaried workers. About 2,200 accepted buyouts and GM said in a statement that the remainder are being offered outplacement services to help them transition to new jobs.

Barra also met with lawmakers from Maryland, where a powertrain plant is being idled. She is scheduled to meet on Thursday with the delegation from Michigan, where two plants are at risk. 

In a statement released later Wednesday, Barra called the meetings “very constructive.”

“I informed the members that many hourly employees at the impacted U.S. plants will have the opportunity to work at other U.S. GM plants and that we are committed to working with them to minimize the impact on the communities,” the statement said. “I also informed them that all salaried GM workers impacted by these actions are being offered outplacement services to help them transition to new jobs.”




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