The Nov. 26 announcement from General Motors Co. that it plans to shut down five factories and lay off thousands of workers sent shock waves through the government and business communities, and with good reason. It is a major U.S. manufacturer, and one whose fortunes have historically been tied to those of the country.
IMPACT: Trucking braces for fallout
Many know the famous quote attributed to Charles Wilson, the former CEO of GM who during confirmation hearings to become Dwight Eisenhower’s secretary of defense said that he believed that what was good for the country was good for GM, and vice versa. Now it is up to current CEO Mary Barra to convince government and business leaders that the company’s restructuring is good for its long-term future and, by extension, American workers left to help carry out the plan.
It is important to remember that it wasn’t so long ago that GM sat on the brink of bankruptcy, seeking government aid and facing questioning on Capitol Hill for not addressing weaknesses in its business to stave off the dire situation it landed in. Arguably, the company now is facing criticism for doing the opposite; its sedans aren’t selling, so it is shifting resources to areas — notably electric power, as well as autonomous vehicles — where it sees potential growth. There are steep costs: GM plans to eliminate 14,000 blue- and white-collar jobs, which has drawn the ire of President Donald Trump. He wants GM to save some of those jobs. Perhaps some of the factories to be shut down could be revamped as part of the restructuring. That would be ideal.
Barra, whose father worked for GM, surely doesn’t want to see jobs lost. But the GM of today is not the same as the one for which her father worked; it’s a more global enterprise, with some nameplates that are more popular in other countries than they are stateside. And its home market simply doesn’t support every product it produces. Rather than continuing down an unprofitable path, as it has in the past, the company is trying to avoid another financial catastrophe by making tough decisions. But it is in the early stages of this plan. Let’s hope it can find a way to repurpose some U.S. manufacturing capacity so that workers in plants targeted for closure can be part of the future GM sees for itself. Because a strong domestic front is good for a global operation like GM.