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What To Know About GM, Lordstown And Trump

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What To Know About GM, Lordstown And Trump

General Motors Company (NYSE: GM) said it will negotiate with the United Automobile Workers — and the UAW only — this fall to decide the fate of the recently shuttered Lordstown, Ohio, plant. But some stakeholders are growing impatient.

“Why wait, start them now!” President Donald Trump tweeted Monday morning. “I want jobs to stay in the U.S.A. and want Lordstown (Ohio), in one of the best economies in our history, opened or sold to a company who will open it up fast!”

"Lordstown is the first of the four US plants GM is closing. It had 1,435 hourly workers last year at the time the company announced plans to close it," according to CNN.

What Happened

Last week, Toyota Motor Corp (NYSE: TM) announced plans to boost its investment in U.S. manufacturing. The foreign expansion seemed to spook Trump, who tweeted a Saturday plea to GM to reopen its Lordstown plant.

He followed Sunday with critiques of UAW leadership and GM CEO Mary Barra.

GM responded to the tweets with a Sunday press release asserting its ultimate authority on the future of discontinued plants.

"To be clear, under the terms of the UAW-GM National Agreement, the ultimate future of the unallocated plants will be resolved between GM and the UAW,” the firm said. “We remain open to talking with all affected stakeholders, but our main focus remains on our employees and offering them jobs in our plants where we have growth opportunities. We have now placed over 1,000 employees from our unallocated plants to other GM locations, and we have opportunities available for virtually all impacted employees."

Why It’s Important

The UAW is suing GM for closing the Lordstown plant, which allegedly violates GM’s 2015 contract. Trump and other lawmakers have also criticized management’s restructuring plans, which include the closure of five North American plants by early next year.

GM justifies its course by citing changing market conditions. The company will discontinue products built at the targeted plants and save $2.5 billion this year in the process.

The political and union backlash stunts GM’s strategy to realign with consumer preferences and cut costs as it competes with rising rivals in Tesla Inc (NASDAQ: TSLA) and foreign automakers.

GM will negotiate with union leaders in September or October. Some have speculated they may consider a sale to Tesla.

GM traded lower by 1 percent Monday to $37.66 per share.

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Photo credit: InSapphoWeTrust, Wikimedia. The Cruze was built in the Lordstown plant.

Posted-In: Donald Trump Lordstown Mary Barra Ohio UAWNews Top Stories Media Best of Benzinga

 

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