Trump’s latest US corporate Twitter target: General Motors

Cruze hatchback production amounts to less than a day of output at the Lordstown plant, said Glenn Johnson, president of a United Auto Workers union local at the factory. The union, he said, is not protesting the move to build the hatch in Mexico.

“It makes for news, that’s all,” Johnson said of Trump’s tweet. The Lordstown factory, he said, is not equipped to build the hatchback model.

Trump spokesman Sean Spicer said the GM tweet wasn’t about just one company. “I think he generally made it very clear he wants to bring American jobs home. He doesn’t want jobs to leave this country,” he said.

Immediately after the tweet, which was posted around 7:35 a.m., GM shares fell about 1 per cent in premarket trading. But by early afternoon they had rebounded and were up 0.5 per cent to $35.01.

The tweet was the latest threat from Trump to tax companies that move production to Mexico and ship products back to the U.S. Trump’s targets have ranged from U.S. retailers and defence contractors, to tech companies. Amazon.com, Boeing and Macy’s have been the subject of Trump tweets in the past.

Last year Trump went after Ford Motor Co. for plans to shift production of the compact Focus to Mexico. Jobs at the Detroit-area factory that now makes Focuses would be preserved because the plant is to get a new small pickup truck and SUV.

Ford announced Tuesday that Focus production is still going to Mexico, but it would scrap plans for a new $1.6 billion plant in Mexico. Instead, it will invest $700 million at a Michigan plant to make autonomous and electric vehicles, creating 700 U.S. jobs.

Last year Trump touted a deal to keep 800 jobs at the Carrier furnace factory in Indianapolis from going to Mexico. He has promised to lower corporate tax rates to preserve factory jobs inside the United States, while threatening harsh penalties for companies that produce goods overseas to save on labour costs. On Twitter, Trump warned that he will impose a 35 per cent tariff on the goods imported by companies that outsource production.

Nearly every automaker produces small cars in Mexico to take advantage of lower labour costs. Companies have said it’s difficult to make lower-margin small cars profitably in the U.S. due to higher wages here.

Last year, GM, Ford and Fiat Chrysler made about 1.6 million vehicles in Mexico, about 17 per cent of the vehicles produced overall in North America, according to the Center for Automotive Research in Ann Arbor, Michigan. That’s projected to rise to 2.5 million, or about 26 per cent, by 2022. Automakers and parts supply companies have added 12,000 U.S. jobs in the past year, according to government statistics.

GM did import some Cruze sedans from Mexico last year to meet demand as it was rolling out a new version of the compact car, Morrissey said, but that has stopped and all sedans sold in the U.S. are now made in Ohio, he said.

In November, GM said it would lay off about 1,250 workers at the Lordstown plant due to sagging demand for cars as U.S. buyers take advantage of low gasoline prices to buy trucks and SUVs. The workers on the third shift at Lordstown will go in indefinite layoff starting Jan. 23, although some may move to other GM factories.

Workers on two shifts will continue making the Cruze in Ohio even though its sales were down more than 18 per cent through November.

Shifting demand from cars to trucks and SUVS is forcing General Motors to lay off more than 2,000 workers. Last month, 61.5 per cent of U.S. new vehicle sales were trucks and SUVs, according to Autodata Corp., and analysts say there’s no sign that will change anytime soon.

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Josh Boak and Christopher S. Rugaber contributed to this report from Washington.

Tom Krisher, The Associated Press

by Canadian Press

Trump’s latest US corporate Twitter target: General Motors

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