GM CEO Mary Barra faces harsh criticism over Mexico investments

Mary Barra

General Motors CEO Mary Barra came under criticism from members of Congress from Michigan for building a new vehicle in Mexico yet ending production at five North American assembly plants and removing almost 15,000 jobs.

On the second day of meetings on Capitol Hill, Barra dealt with a tough session with normally supportive lawmakers from the state where the automaker is based and has thousands of employees.

Senator Gary Peters, a Michigan Democrat, asked why GM was launching production of its new Chevrolet Blazer SUV in Mexico as it was slashing production in the United States and stated the company needs to move the vehicle 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 declared it was spending $5 billion in Mexico through 2018 to modernize and increase its manufacturing facilities there. GM says that since 2009 it has spent $22 billion in U.S. facilities.

Representative Sander Levin, a Michigan Democrat, stated the automaker pays less than $3 per hour at four plants in Mexico, a fraction of what it pays in the United States.

Lawmakers were outraged by the lack of notice before automaker’s job cut announcement last week and wanted assurances that the automaker would not be closing other U.S. plants.

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

GM is putting the production at its Detroit-Hamtramck Assembly plant next year, as well as at its Warren Transmission plant in suburban Detroit, along with plants in Ohio, Maryland and Canada, to an end and removing about 8,000 salaried positions.

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

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