Trump warns USA may cut off GM subsidies

Muriel Colon
November 28, 2018

Reacting sharply, Trump asked the General Motors to review its decision, which the auto major said would help it save around United States dollars 4.5 billion in costs by the end of 2020.

"We've done this to help you and I think his disappointment is, it seems like that they kind of turned [their] back on him."

Kudlow says he didn't see a recession in the offing and didn't rule out that the White House may take action against GM.

President Trump's response wasn't as measured as he tweeted "Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland".

"I love OH. I told them, "You're playing around with the wrong person", he said, referring to his talks with the GM leadership.

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

Currently, consumers who purchase a fully-electric vehicle are eligible for a US$7,500 federal tax credit.

Tesla Inc. has already reached the cap and GM is expected to be next.

Asked about Trump's tweet, White House Press Secretary Sarah Huckabee Sanders told reporters at a briefing, "I don't know that there's a specific timeline".

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


While GM, and other vehicle 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".

In a statement Tuesday afternoon, GM tried to appease the Trump administration while at the same time justifying the decisions it announced Monday.

He said that the administration would be looking at certain electric auto subsidies, but that he "can't say anything final about that".

That said, GM still has skin in the game.

But those expansions aren't enough to accommodate all of the roughly 3,300 USA factory workers who could lose their jobs.

"The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future", Barra said. I spoke with her when I heard they were closing.

The factory announcements likely represented GM's opening bid in contract talks with the union that start next year, said Kristen Dziczek, vice president of labor and industry with the Center for Automotive Research, an industry think tank in Ann Arbor, Michigan.

"He's looking into what those options might look like", she said. But it later negotiated concessions from the union and reopened the plant to build the Chevrolet Sonic subcompact auto.

The reductions could amount to as much as 8 per cent of GM's global workforce of 180,000 employees.

And Trump himself is crystallizing that disappointment, threatening to pull federal help for the automaker if it follows through on plans to build new interconnected, electric-powered vehicles outside the USA - particularly in China, the president's main trade rival. That figure was about 50 per cent cars just five years ago. "That's what we're working towards", Foreign Affairs Minister Chrystia Freeland said Tuesday.

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