Why did GM choose Wall Street over Michigan?

What happened to "As goes GM, so goes the nation?"

GM headquarters.
(Image credit: JEFF HAYNES/AFP/Getty Images)

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General Motors has a message for thousands of American workers, said the Pittsburgh Post-Gazette in an editorial: "Merry Christmas, and drop dead." The car company announced last month that it would cut 14,000 jobs and shutter five plants. GM's CEO said the company is actually doing well — they're just trying to keep it that way by slashing some deadweight: its slow-selling, smaller sedans. Trucks and SUVs are what Americans want to buy. Ford and Chrysler are making the same product shift. "But the way GM is restructuring — moving more auto workers' jobs, if not most of them when it all shakes down, to outside this country — is a betrayal, pure and simple." America bailed out GM for a reason. Taxpayers coughed up $11.2 billion for the company. "And, yes, saving GM saved 1.2 million jobs." It was worth it. But now, "GM has an obligation to the country that saved it." If the automaker doesn't stop its layoff plan, the U.S. should "slap a mighty tariff on every car it makes overseas."

"The news is disappointing, but GM's logic is sound," said the Chicago Tribune in an editorial. "GM needs to invest in its future, and that means focusing on electric and self-driving vehicles." It would be better if every American manufacturer were a "powerhouse, but GM lost that status decades ago." After the bailout, the company "retooled as a profit-focused entity rather than one obsessed with market share." Ultimately, "staying big for pride's sake is a loser's game." What's good for GM and its workers is "making steady profits." GM's restructuring plan was "met with anger, except on Wall Street," said Michael Wayland at Automotive News. As union leaders and politicians condemned the company, Wall Street "praised GM's cost-cutting measures, expected to save the automaker $6 billion annually by 2020." And even as CEO Mary Barra was making her layoff announcement, the company was running an orientation for new hires, who would work on projects such as GM's planned new electric-vehicle platform.

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A big loser in the GM layoffs may be President Trump, said Mark Weinberg at CNN. The argument that Trump has been good for the economy just became "a tougher pill to swallow." Thousands of auto workers voted for Trump believing he would protect their jobs. Trump even told Ohio residents not to sell their homes because the "automaking jobs are making a comeback," in a state where GM is now closing a plant. Meanwhile, the 2017 tax law gave the company a $500 million tax break. The $1 billion cost to GM of Trump's steel tariffs hasn't helped. Trump lashed out at GM on Twitter, but his threats are basically empty, said Emily Stewart at Vox. Trump said he'd add tariffs to cars that GM builds abroad and imports back into the U.S. But these days GM is selling more sedans in China than it is in the U.S. The truth is, "Trump can't always get what he wants: Corporations are going to do what they need to do to make money, even if he tries to strong-arm and shame them into doing otherwise."

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