Published: Wed, November 28, 2018
Money | By Arnold Ball

Trump threatens to end subsidies to GM for electric cars over layoffs

Trump threatens to end subsidies to GM for electric cars over layoffs

Trump wrote that he was "Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland". Following this announcement, President Donald Trump threatened to cut all government subsidies to GM, causing GM's stock to fall. General Motors made a big China bet years ago when they built plants there (and in Mexico) - don't think that bet is going to pay off.

And, referring to the 2008 federal bailout of the auto industry, Trump angrily continued that "the USA saved General Motors, and this is the THANKS we get!"

The president floated the idea of cutting subsidies for GM's electric cars program. "I am here to protect America's Workers!" he declared. Kudlow, who met with Barra on Monday, said that Trump felt betrayed by GM, which the government had been trying to help.

He also stressed, however, that while the layoffs were "brutal" and "very disappointing", he did not think that they would "affect the overall economy".

"We appreciate the actions this administration has taken on behalf of the industry to improve the overall competitiveness of USA manufacturing".

What that would look like wasn't immediately clear: electric vehicles are eligible for a US$7,500 federal tax credit, but neither the president nor Kudlow provided additional details as to whether that's what they're reconsidering. "Can't say anything final about that, but we're looking into it".

"There's great disappointment that it seems like GM would rather build its electric cars in China rather than the United States", Larry Kudlow, director of the White House National Economic Council, told reporters Tuesday, just before Trump's missives.

Trump thanks himself on Thanksgiving
Trump on Thursday also said "two days ago we closed the border", and added, "nobody's coming in". Coast Guard that he and first lady Melania Trump wanted to express their "profound gratitude".

Among the vehicles GM offers is the battery-powered Chevrolet Bolt, which can go 238 miles on a single charge. If this were to happen, it could prove disastrous for the company as it has plans to introduce at least 20 new electric vehicles by 2023.

GM said numerous USA employees impacted by the plan announced Monday will have the opportunity to shift to other plants where the company will need more workers to support growth in trucks, crossovers and SUVs.

The reductions could amount to as much as 8 per cent of GM's global workforce of 180,000 employees. "It emphasizes what a precarious position the North American auto industry is in, and why we needed the changes that we see in the new NAFTA".

Trump has long promised to return manufacturing jobs to the United States and particularly the Midwest.

In October, nearly 65 per cent of new vehicles sold in the U.S. were trucks or SUVs.

While GM, and other auto companies, have spoken out against rising production costs caused by the Trump administration's protectionist tariffs, a spokeswoman for the company told TheBlaze that the layoffs and plant closures "are being made as part of our ongoing transformation and are not related to recent trade or tariff decisions".

"GM is committed to maintaining a strong manufacturing presence in the US, as evidenced by our more than $22 billion investments in USA operations since 2009", the company said in a statement, referring to the year of its government-backed bankruptcy.

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