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G.M. to Idle Plants and Cut Thousands of Jobs as Sales Slow

Category: Automobile,Finance

The Trump administration has moved to scrap stringent emissions requirements put into place under President Barack Obama, but the industry hopes that Mr. Trump will relent and reach an agreement with California, which sets its own emissions requirements. Automakers are wary of having two sets of standards.

Before the election and after, Mr. Trump prodded Ford, G.M. and others to build plants in the United States instead of Mexico or China. As events have played out, however, his determination to rework the North American Free Trade Agreement is expected to have a modest impact on automakers, preserving much of the original 1994 accord.

The terms negotiated with Canada and Mexico stipulate that at least 75 percent of an automobile’s value must be produced in North America for a company to import it into the United States duty-free, and that 40 to 45 percent of a vehicle’s value must consist of parts made by workers earning at least $16 an hour, a provision aimed at shrinking Mexico’s wage advantage. Analysts believe the changes will have little to no effect on American jobs.

Over all, the American auto industry has added nearly 350,000 jobs since the industry bottomed out in the wake of the recession. But the industry still employs tens of thousands fewer people than before the crisis, and hundreds of thousands fewer than in 2000.

About 970,000 people worked in the United States auto industry in October, an increase of 12,800 since Mr. Trump took office. Most of that growth, however, came among manufacturers of recreational vehicles and trailers, as well as in auto parts. Through October, automakers like G.M. had cut about 7,000 jobs under Mr. Trump, government figures show. (Those numbers don’t include the hundreds of thousands of workers employed by auto dealers, repair shops and related industries.)

Ms. Barra said G.M. would set aside up to $2 billion in cash to pay for the job reductions announced Monday, and take noncash charges against its pretax earnings of about $1.8 billion. The charges will affect earnings in the fourth quarter of 2018 and the first quarter of 2019.


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