Needless to say, he isn't too happy.
Now that General Motors has announced its aggressive cost-saving plan that involves discontinuing six sedans and shutting down four US assembly plants (and one in Canada), the political fallout will begin. As expected, President Trump was not happy with GM CEO Mary Barra’s decision and he made this crystal clear on Twitter.
“The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including ... for electric cars,” Trump wrote on Twitter. “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. I am here to protect America’s Workers!” These subsidies make GM’s electric vehicles, specifically the Bolt, eligible for a $7,500 federal tax credit.
Question is, can the Trump Administration legally restrict those credits to only one automaker, as they’re available to all. It’s also worth noting that GM’s EV tax credit will begin to be phased out anyway by the end of this year, and will continue to drop by half every six months after that. This was all planned before GM’s announcement, so Trump’s threat doesn’t really tread water. But he had to say something bold because a significant part of his 2016 presidential campaign focused on preserving and bringing back American jobs. But Trump’s harsh language did have a negative impact on GM because its shares dropped by 2.6 percent on Tuesday. Meanwhile, Trump is reportedly examining other options about how to handle the situation. Should GM be punished somehow?
After all, it was not only factory workers who will lose their jobs. As part of the plant closures and model elimination, the automaker also announced plans to cut about 8,000 to 54,000 salaried workers in the US. A total of 6,500 factory jobs will be cut as well. Barra also spoke personally with Trump and White House economic advisor Larry Kudlow last weekend about her decision, and these discussions are reportedly still ongoing. On Monday, Trump was very direct with GM, stating it had “better” find a new vehicle to build at one of the plants, the Lordstown, Ohio facility that makes the Chevrolet Cruze. That part of Ohio voted overwhelmingly for Trump and his jobs-focused platform. Unfortunately for Lordstown, consumer demand has significantly dropped for the Cruze for quite some time, so GM’s decision should not be much of surprise.