Trump threatens to cut GM’s electric car subsidies because of plant closures

Trump threatens to cut GM’s electric car subsidies because of plant closures


U.S. President Donald Trump said Tuesday that he was “very disappointed” that General Motors was closing plants in the United States and warned that the White House was “now looking at cutting all GM subsidies,” including for its electric cars program.

Trump unleashed on Twitter a day after GM announced it would shutter five plants and slash 14,000 jobs in North America, with many of the job cuts coming from the U.S.Midwest, where the president has promised a manufacturing rebirth.

Trump’s incendiary tweet came a short time after National Economic Council director Larry Kudlow said the White House’s reaction was “a tremendous amount of disappointment maybe even spilling over into anger.” Kudlow, who met with GM CEO Mary Barra on Monday, said that Trump felt betrayed by GM, which the government had been trying to help.

“Look, we made this deal, we’ve worked with you along the way, we’ve done other things with mileage standards, for example, and other related regulations,” Kudlow said. “We’ve done this to help you and I think his disappointment is, it seems like that they kind of turned his back on him.”

Rebates of up to $7,500 per electric car

A White House rebuke to GM would fly in the face of what some describe as long-held Republican opposition to picking winners in the marketplace. It’s not clear precisely what, or when, action may be taken. White House press secretary Sarah Huckabee Sanders said that she did not have any additional information on the president’s threat.

Buyers of electric vehicles made by GM and other automakers get U.S. federal tax credits of up to $7,500, helping to reduce the price as an incentive to get more of the zero-emissions vehicles on the road.

Dwayne Killingbeck bolts parts to a Camaro on the assembly line at the GM plant in Oshawa, Ont. The facility is one of six the automaker says it plans to soon mothball. ( Norm Betts/Bloomberg News )

Among the vehicles GM offers is the battery-powered Chevrolet Bolt, which can go almost 400 kilometres on a single charge. The company has pinned much of its future business plan on consumers switching to battery-powered vehicles, promising to roll out 20 new ones globally by 2023.

GM on Monday announced it would cut six gas-powered car models as part of a plan to close factories and cut costs so it can spend more on electric and autonomous vehicle development.

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

Prime Minister Justin Trudeau spoke to Trump on Tuesday and both men expressed their disappointment about plans by General Motors to shut down auto plants, a senior Canadian official told reporters.

“They underscored their concerns for the workers, for the communities and for the families that are affected by this decision,” the official told reporters.

The restructuring reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. In October, almost 65 per cent of new vehicles sold in the U.S. were trucks or SUVs. That figure was about 50 per cent cars just five years ago.

Trump has long promised to return manufacturing jobs to the United States and particularly the Midwest. At a rally near GM’s Lordstown, Ohio, plant last summer, Trump told people not to sell their homes because the jobs are “all coming back.”

The layoffs come amid the backdrop of a trade war between the U.S., China and Europe that likely will lead to higher prices for imported vehicles and those exported from the U.S. Barra said the company faces challenges from tariffs but she did not directly link the layoffs to them.

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