 Happy Monday and welcome back to On The Money, where we're slowly emerging from a holiday food coma. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line. See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N. Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @VickofTheHill, @NJagoda and @NivElis. THE BIG DEAL--GM to cut as many as 15,000 US, Canadian jobs, may close 5 plants: General Motors announced Monday that it would shutter as many as five auto manufacturing plants in North America -- four in the United States -- and cut thousands of jobs across the company. Those five plants assemble and produce parts for several Chevrolet, Cadillac and Buick vehicles that GM said would be discontinued within the next two years. As many as 5,901 hourly and 804 salaried workers could lose their jobs if GM does not allocate a new product to the plants. GM also said it would cut the company's corporate workforce by 15 percent and slash 25 percent of executive positions in an effort to save $6 billion in costs and capital expenditures by the end of 2020. I break down the announcement and Washington's explosive reaction to it here. The plan: - GM said it would not assign products in 2019 to auto assembly plants in Detroit-Hamtramck, Mich.; Lordstown, Ohio; and Oshawa, Ontario, and propulsion plants in Warren, Mich., and White Marsh, Md.
- The Associated Press reported that GM will cut almost 15,000 hourly and salaried jobs in North America.
- News channel WFMJ, the NBC affiliate station in Lordstown reported that employees were told the plant will close in March. Reuters also reported that Canadian auto worker union Unifor said Sunday it was told by GM that there would be no product allocated to the Oshawa plant in 2020.
The rationale: - GM said it plans to shift focus to autonomous and electric vehicles and pull back from less popular sedans by discontinuing the Chevrolet Volt, Cruze, Impala, the Buick LaCrosse, the Cadillac CT6 and XTS sedans in 2019.
- Those cuts come as SUVs and trucks make up a growing share of U.S. automaker sales, which have declined on whole for several years.
Trump's reaction: Wall Street cheered the news and sent GM's stock 4.76-percent higher in Monday trading. But Washington exploded in bipartisan outrage, with President Trump demanding that GM keep its Ohio plant open. "I have no doubt that in a not too distant future they'll put something else. They better put something else in," Trump said. "I said, 'This country's done a lot for General Motors, you better get back in there soon. That's Ohio, and you better get back in there soon." Elected officials from Ohio and Michigan blasted GM after the announcement, accusing the company of betraying workers after reaping billions of dollars in bailout funds in 2009-10 and tax breaks through the 2017 tax-cut law. - "We fought together to keep GM afloat and the American taxpayers bailed them out when they were on the verge of bankruptcy," said Rep. Tim Ryan (R-Ohio), whose district includes the Lordstown plant. "Thousands of families have sacrificed to build GM into what it is today. And in return, GM has turned its back on us when we need them the most."
- "For decades, workers in the Mahoning Valley have made a commitment to GM, and today GM let Northeast Ohio down," said Sen. Rob Portman (R-Ohio).
- "If we want our auto industry to continue to be the global leader in transforming mobility, federal policy must ensure we keep them at the forefront of innovation and technology," said Rep. Debbie Dingell (D-Mich.), who represents parts of the Detroit suburbs.
What comes next: Ohio and Michigan officials say they will push Barra for a reprieve from the planned cuts, but local company employees are bracing for devastating plant closures as soon as March 2019. And you can expect Trump, who is immensely popular in Ohio, to blast GM is they don't reopen the Lordstown plant. "I love Ohio," Trump told The Wall Street Journal. "I told them, 'you're playing around with the wrong person.'" Further reading: - Workers walked off the job at the General Motors plant in Oshawa, Ontario, after GM announced on Monday that the facility might be closed as part of almost 15,000 job cuts.
- Rep. Tim Ryan (D-Ohio) is urging the leaders of the House Ways and Means Committee to hold hearings to examine how General Motors used its savings from the GOP tax law.
LEADING THE DAY Trump: US probably bringing higher tariffs on China: President Trump said it was "highly unlikely" that the U.S. would delay a scheduled tariff increase on $200 billion of Chinese imports unless a new trade deal is in place. "If we don't make a deal, then I'm going to put the $267 billion additional on," Trump said in an interview with the Wall Street Journal published Monday. In September, the Trump administration imposed 10 percent tariffs on $200 billion of Chinese imports goods, and threatened to raise the tariffs to 25 percent on Jan. 1 unless the U.S. and China reach a trade agreement. At the time, Trump threatened additional tariffs of $267 billion in the event that China retaliated with its own tariffs, which it did. The Hill's Niv Elis tells us what's at stake here. What comes next: Trump is scheduled to meet with Chinese President Xi Jinping this week at the G-20 summit in Argentina, where trade is expected to be among the top issues discussed by leaders from the world's 20 biggest economies. Farm bankruptcies on the rise according to new Fed report: Farm bankruptcies are on the rise in the Upper Midwest, according to a new report from the Federal Reserve, doubling from their recent lows in 2014. At least 84 farms filed for bankruptcy from June 2017 to June 2018 in Wisconsin, Minnesota, Montana, and North and South Dakota, according to analysis from the Federal Reserve Bank of Minneapolis. The report released earlier this month shows that over the same time period in 2014, 32 farms filed for bankruptcy. The numbers have increased steadily since then, with 46 bankruptcies reported in 2015, 60 bankruptcies reported in 2016 and 67 reported in 2017. In 2010, 70 bankruptcies were reported in the five states, but that was following the financial collapse of 2008–2009 and a brutal recession.
What's going on? Some experts fear the worst is yet to come amid falling commodity prices and the Trump administration's battles with China and other countries on trade. Trump's last, best chance for wall creates latest shutdown threat: Congress is returning to Washington with a tight deadline to pass seven spending bills and avert a partial government shutdown over President Trump's demand that lawmakers fund his wall on the Mexican border. The partial shutdown will take place on Dec. 7 if Congress does not pass legislation, creating the last chance for Trump to win wall funding before Democrats take over the House majority in January. Trump has threatened to veto a spending bill that does not include funding for the wall. If he follows through, the partial shutdown would hit the Homeland Security, Justice and State departments, among other government entities. Niv Elis tells us what's ahead here. Record Cyber Monday?: The Monday after Thanksgiving weekend, dubbed "Cyber Monday" for its onslaught of online discounts, is on track to set U.S. online shopping records this year. Cyber Monday retailers are poised to rack up $7.8 billion in U.S. online sales in 2018, 18.8 percent more than users spent in 2017, according to Adobe Analytics. People were predicted to spend around $1.6 billion between 10 p.m. and 1 a.m. EST, about $200 million more than a typical day for retailers, USA Today noted. Still, the record-breaking sales are not far behind Black Friday digital sales, which spiked 23.6 percent to hit $6.22 billion this year, according to Adobe. The Hill's Emily Birnbaum has more here. MARKET CHECK: CNBC: "The Dow Jones Industrial Average rose 354.29 points to 24,640.24, posting its biggest gain since Nov. 7, while the S&P 500 gained 1.55 percent to end the day at 2,673.45. The Nasdaq Composite outperformed, rising more than 2 percent to close at 7,081.85." GOOD TO KNOW ODDS AND ENDS |
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