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GM CEO faces harsh criticism from U.S. lawmakers over Mexico investments

WASHINGTON (Reuters) – General Motors Chief Executive (GM.N) Mary Barra got here beneath harsh criticism from members of Congress from Michigan on Thursday for constructing a brand new car in Mexico whereas ending manufacturing at 5 North American meeting crops and chopping practically 15,000 jobs.

General Motors (GM) Chairman and CEO Mary T. Barra pauses as she speaks to the media after a gathering with Michigan Congressional delegation on Capitol Hill in Washington, U.S., December 6, 2018. REUTERS/Yuri Gripas

On the second day of conferences on Capitol Hill, Barra confronted a troublesome session with usually supportive lawmakers from the state the place GM relies and has hundreds of employees.

Senator Gary Peters, a Michigan Democrat, questioned why GM was launching manufacturing of its new Chevrolet Blazer SUV in Mexico because it was chopping manufacturing within the United States and stated the corporate wants to maneuver the car to the United States.

“We did get answers as to some of the decisions that they made. But I think they need to revisit that thought process and understand the importance of making (vehicles) locally,” Peters stated. “The reason you have excess capacity in the United States is because you’ve built capacity in Mexico.”

In 2014, GM introduced it was investing $5 billion in Mexico by way of 2018 to modernize and develop its manufacturing services there. GM says that since 2009 it has invested $22 billion in U.S. services.

Representative Sander Levin, a Michigan Democrat, stated GM pays lower than $three an hour at 4 crops in Mexico, a fraction of what it pays within the United States.

“It’s been very profitable to leave the United States and go to Mexico,” Levin stated of GM’s expanded manufacturing of vehicles and SUVs in Mexico.

Lawmakers have been angered by the dearth of discover earlier than GM’s job reduce announcement final week and wished assurances that GM wouldn’t be closing extra U.S. crops.

Barra advised reporters after the conferences it was “important for General Motors to make necessary but incredibly difficult changes.”

GM is ending manufacturing at its Detroit-Hamtramck Assembly plant subsequent 12 months, in addition to at its Warren Transmission plant in suburban Detroit, together with crops in Ohio, Maryland and Canada and eliminating about eight,000 salaried positions.

Barra stated the choice to construct the Blazer in Mexico, which was introduced in June, “was made many years ago.”

She advised Reuters on Wednesday it might be “very costly” to reverse course as a result of the brand new SUV was launching in days. She additionally famous GM is launching quite a lot of new autos in Michigan subsequent 12 months.

Asked if any extra U.S. services have been prone to closing, Barra stated GM “looked at what steps we needed to take to strengthen the company… We think the steps we’ve taken are what’s necessary for our future.”

Representative Tim Walberg, a Michigan Republican, stated lawmakers have been caught off guard by the job cuts and expressed their anger, however added, “nothing was thrown.”

Representative Brenda Lawrence, who represents Detroit, stated lawmakers have been placing GM was on discover about future manufacturing selections, noting the corporate is making sturdy income and obtained a large taxpayer bailout a decade in the past.

“We are watching the decisions they are making,” Lawrence stated.

Reporting by David Shepardson; Editing by Bill Berkrot

Our Standards:The Thomson Reuters Trust Principles.

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