General Motors is an iconic company in the automobile industry. For over 100 years, the company has produced quality vehicles in the United States. In recent years, the company has struggled to be profitable. Not only are fewer people driving cars, but new tariffs imposed on Chinese products are increasing costs for the company.
In a recent announcement, the company said it would pull production out of Ohio. Ohio is home to multiple factories the company owns. The news came as a shock to people living in the area. Even President Trump made negative comments about the announcement.
One of the most significant costs of operating a company is labor. For years, General Motors struggled to reduce labor costs. The new CEO of the company is taking drastic actions for the company to survive. General Motors is discontinuing production on multiple types of vehicles that are not as profitable.
There will be higher initial costs in the wake of these layoffs. General Motors will provide generous financial packages for the employees who will no longer have jobs. However, the local economy in these cities will be negatively impacted. Not only will housing prices fall, but many people will look at other places to live.
Trump Questions Move
When the decision was announced, President Trump immediately discussed the negative implications for General Motors. During his campaign, President Trump promised many automobile workers that they would keep their jobs. After a significant tax cut in 2017, no one thought that General Motors would cut jobs this year.
Future of the Industry
Autonomous driving is the future of the automobile industry. The leaders of General Motors announced that millions of dollars of additional funding would be used to improve technology for autonomous vehicles. Although General Motors is taking drastic actions to reduce costs, many people have an issue with the company firing thousands of workers.