Despite making over $8.1 billion in profit after taxes in 2018, General Motors is planning to close plants in Detroit-Hamtramck, Warren, Mich., Lordstown, Ohio, White Marsh, Md. and Ontario, Canada. The decision to cut costs was made to save the company $6 billion by 2020 and the company plans to open new plants in Mexico.
The Detroit-Hamtramck plant supports over 1,500 employees and altogether around 14,000 jobs will be lost.
This is a continuation of the unethical business atmosphere that has plagued this country for years. It’s not at all uncommon for a business to announce factory closures as it moves jobs to Mexico to increase profits. For example, in July 2016, Mondelez International, the company that manufactures Oreo cookies, closed one of its plants in Chicago and opened a new one in Salinas, Mexico.
Destroying jobs in the United States to take advantage of human labor in Mexico, where labor laws are much looser than in the U.S., is unethical by all standards. At the very least, if companies make the decision to move production to Mexico, the employees there should be paid a fair, living wage and should be subject to safe working conditions.
Electrolux, a Swedish home appliances manufacturer, made a similar move in 2004. The company moved 2,400 jobs from Greenville, Michigan to Juárez, Mexico. The employees at the plant in Greenville made $15 an hour, while the employees at the new plant in Mexico made only $1.50 an hour. This highlights the extreme greed of corporations in the world.
The company also closed a plant in Sweden but instead of leaving the community behind, a local union pressured the company into giving $3 million to the town to help encourage new business start-ups. This aid was not given to Greenville when the plant closed.
That same pressure should be exerted on GM. If the company will be saving $6 billion for the move, it should invest in the cities it is leaving. The fact that the entirety of that extra profit will be going to people who are already incredibly well-off is disgusting and immoral.
Union activists, the state of Michigan and consumers alike should exert pressure on GM to make these investments. Clearly the company doesn’t care about our communities, so we need to let them know that that type of business behavior is unacceptable.
GM also received significant tax cuts from President Donald Trump’s new tax law, as the tax rate on corporations dropped from 35 percent to just 21 percent. Despite this, and making $8.1 billion in profits last year, the company will not be giving any bonuses to employees. Instead, it’s choosing to destroy jobs and leave communities in the dust.
The plant in Detroit-Hamtramck alone paid over $25 million in state taxes in 2017. The plant’s closing will take an estimated $850,000 out of the Hamtramck city budget and the city of Detroit could lose $2 million. As a result, there will be less money in the state’s school aid fund.
Instead of stripping these communities of much-needed funding and destroying the livelihood of thousands of people, GM should be debating on how to better invest in the country, the state and local communities. Rather than packing up and moving to Mexico, serious thought should be given on how to send a message to other corporations about how to run a business ethically.
