IE 11 is not supported. For an optimal experience visit our site on another browser.

After General Motors layoffs, more bumps ahead for U.S. auto industry

General Motors is cutting jobs in area President Trump had promised to revitalize.
Get more newsLiveon

The president said the jobs were "all coming back," but there's more rough road ahead for U.S. auto industry, analysts warn.

"If I'm elected, you won't lose one plant. You’ll have plants coming into this country," then-candidate Donald Trump said at a campaign rally in Warren, Michigan, in October, 2016. "You’re going to have jobs again, you won’t lose one plant. I promise you. I promise you.”

And at a rally in Youngstown, Ohio, in July of last year, the president vowed to bring more factory jobs back to the area.

"They're all coming back," he told the crowd. "Don't sell your house . . . We're going to fill up those factories or rip them down and build new ones."

On Monday, General Motors announced it was cutting 14,700 jobs in North America — including several thousand in Ohio and Michigan. That's on top of thousands of jobs the company had already trimmed over the past two years.

Auto industry analysts told NBC News more industry downsizing is likely — and Trump's trade policies aren't helping.

"The automotive market has been shifting away from conventional sedans and more to utility vehicles. It's no longer a U.S. phenomenon, it's true in markets around the world. And GM is the one with the most excess capacity in sedans," said Bernard Swiecki, assistant director of the industry, labor and economics group at the Center for Automotive Research. Trump's tariffs on steel and aluminum, meanwhile, are making the "razor thin" profits on sedans even smaller, he said.

GM has estimated those tariffs have cost the company hundreds of millions of dollars, but downplayed their role in the cuts. Ford - which announced last month it would be making an unspecified number of cuts as part of a "redesign" of the company — says the tariffs have cost the company $1 billion so far.

Robert E. Scott, a senior economist at the Economic Policy Institute, said despite GM's assertions to the contrary, the company is likely trying to protect itself against a future economic downturn.

"They can read the crystal ball and see what's coming," Scott said. "This is the chickens coming home to roost on the broader Trump economic policies."

Trump tax cuts are raising the country's deficits while do nothing to spur investment, Scott said.

"It was counter-productive. All this happy talk about investment is just that," he said, noting that many companies have used money from the tax cuts to increase dividend payments to shareholders and buy back stocks.

In the meantime, Trump's trade policies have been scattershot, and the U.S. auto industry has been continuing to slip in global market share, experts say.

"We've got an incoherent set of trade policies at work," Scott said.

"If nothing is done to address the problems created by Trump's budget and failed trade policies, the problem is going to get worse."

Trump tweeted Tuesday that he may look at cutting GM's subsidies if the company doesn't reinvest in the areas where it's stopping production.

The company then issued a statement noting that, "Many of the U.S. workers impacted by these actions will have the opportunity to shift to other GM plants where we will need more employees to support growth in trucks, crossovers and SUVs. GM’s transformation also includes adding technical and engineering jobs to support the future of mobility, such as new jobs in electrification and autonomous vehicles.

"We appreciate the actions this administration has taken on behalf of industry to improve the overall competitiveness of U.S. manufacturing," the GM statement said.