Barra pressed by Ohio senators to keep GM’s Lordstown plant open

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Mary Barra on Capitol Hill: "A strong GM is the best way for me to keep the more than 90,000 jobs we have in the United States, alongside all the people who have retired and their pensions." Photo credit: REUTERS

UPDATED: 12/5/18 20:47 ET – adds GM statement

WASHINGTON – The Ohio senators, Sherrod Brown and Robert Portman, urged Mary Barra, General Motors CEO, to speed up contract negotiations with trade union officials and make decisions about where new products could be built so that the Lordstown factory can to keep working.

Barra, lawmakers meeting Wednesday on Capitol Hill, said the company was focused on finding transfer and retraining opportunities for some of the 6,000 employees affected by last week's decision to stop making different models with slow sales, such as the Chevrolet Volt plug-in hybrid sedan.

The GM leader criticized that the company owed it to the employees to keep them in service after accepting a billions rescue package from the federal government ten years ago.

"We will be eternally grateful for the help that the US government has offered GM, but we are trying to make sure we are good corporate citizens and continue to provide jobs and transportation that customers want in this country," Barra told reporters after they left a meeting with the senators. "That is the most responsible thing we can do to thank the American taxpayers," she said, adding that GM has invested $ 22 billion in the US 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 lose interest in sedans and car ownership. Barra said that maintaining GM in a period of unrest in the industry would provide the greatest security for GM employees.

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"A strong GM is the best way for me to keep the 90,000-plus jobs we have in the United States, alongside all the people who have retired and their pensions," she said.

The Lordstown factory, which makes the Chevy Cruze, is one of the two assembly plants in the United States on the chopping block, together with two parts factories and another assembly plant in Oshawa, Ontario. Lawmakers have expressed their indignation at GM's surprise decision, saying taxpayers and employees assist GM in times of need and deserve a chance to create the new product lines.

The UAW, representing employees at GM's American plants, formally objected to the company's decision on Monday. The GM-UAW contract expires in September.

Political implications

Brown, a recently won democrat, won re-election in an increasingly reddish state, and Portman, a republican, said GM would need to redesign the plant and build an electric model there or produce the Chevy Blazer SUV or another product from Mexico.

"GM says it will build 20 new EVs in the next five years, and we want one or more of these vehicles to be built in Lordstown, Ohio – that's where it belongs," said Portman.

The Senator said on Wednesday that he had talked with President Donald Trump, Prime Minister Alexander Acosta and Ohio-elected President Michael DeWine, as Senators work with all levels of government to maintain the factory.

Last year's tax bill, which reduced corporate tax rates to 21 percent and GM saved around $ 140 million, makes the US more competitive in the world and should serve as an incentive for companies like GM to reinvest in the domestic production, according to the senators. Portman noted that the account also allows companies to write off capital investments immediately, in contrast to the traditional method of claiming annual depreciation.

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So the tax assessment is exactly the sort of thing that GM should use to reinvest in Lordstown for its new product. We understand that the Cruze does not sell as before. But that factory also deserves the support of this company that has supported it so well over the past five decades, "said Portman.

Other cuts

GM also cuts more than 8,000 employees. Approximately 2,200 accepted buyouts and GM said in a statement that the rest of the outplacement services are being offered to help them transition to new jobs.

Barra has also met with lawmakers from Maryland, where a powertrain system is used. She is scheduled to meet Thursday with the delegation from Michigan, where two factories are at risk.

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

"I have informed members that many employees per hour at the affected US factories have the opportunity to work at other US GM plants and that we strive to work with them to minimize the impact on communities ", according to the statement. "I also informed them that all paid GM employees are offered outplacement services with these actions to help them transition to new jobs."