General Motors (GM) had a news conference this morning to announce restructuring moves that include cutting salaried employment costs by 20% as it seeks to counteract falling sales.
GM, as well as other US car makers, are under pressure these days due to the high fuel prices and the dip in demand for larger cars such as sports utility vehicles (SUVs), as consumers are rapidly switching to smaller, more fuel-efficient cars.
Presidential candidate, Barack Obama, responded to GM’s announcement with this statement:
“We need real change in Washington. That means no longer turning a blind eye to 3.5 million lost manufacturing jobs or waiting 6 years to sit down with the auto companies. It means recognizing the continued importance of the manufacturing sector in our economy, and having a plan to help revive it. It means taking seriously the crippling impact of high health care costs on our manufacturers and putting in place an energy policy that wasn’t written by the oil companies. It means standing up to our trading partners when they manipulate their currencies and fail to abide by the same trade rules that American workers and companies live by. And it means having a President who understands that we have the best workers and best companies in the world, but as we ask them to join us in the great mission of energy independence, we must invest in giving them the tools to succeed.
“When a mainstay of the American economy is forced to make a restructuring decision like the one General Motors is announcing today, it is a sober reminder of the difficult economic times we’re facing and of why we need change and a new direction in Washington. My heart goes out to all the workers and families in Michigan and across the country who will be affected as well as those who have been impacted over the last few months and years of turbulence in the auto industry. America’s auto workers are not just the backbone of our economy, they are on the front lines of our effort to produce the next generation of clean vehicles, strengthen America’s competitiveness and create up to 5 million clean energy jobs here in the United States.
“In recent weeks, I have met with the CEOs of both GM and Ford to talk with them about their economic challenges and about the need for everyone – from auto executives to the federal government – to work toward the energy and economic future the American people deserve. These companies are facing a perfect storm of record gas prices, rising steel prices, a credit market contraction that has made it more difficult for consumers to purchase autos, and a weakening economy that has shed jobs for six straight months. The impact of their hardship goes far beyond their own companies – to the countless suppliers, small businesses and communities throughout our nation who depend on a strong auto industry.
“I have also met with the workers in these plants, men and women who face a different set of economic challenges. Their perfect storm includes paychecks that are being stretched to meet family budgets, intensifying competition from abroad, jobs that are increasingly insecure and little support from a government that has consistently turned its back on the middle-class.
“In this difficult moment, it is clear that just as the American economy cannot succeed without our auto companies, these companies cannot succeed without a strong and growing American economy. And while all of us must take responsibility for building a future of shared prosperity, we will not turn our economy around with more of the same failed economic policies of the last 8 years.
“I have complete confidence that GM and our other auto companies will adapt and thrive in the 21st century economy if we bring real change to Washington and forge a true partnership together. That is what I intend to do as President.”