The fallout continues.
President Donald Trump is not happy with General Motors these days, to say the least. And regardless of what your political views are, the president is right to criticize GM for the upcoming US plant closures and layoffs. However, could GM have found a way to avoid this? Or is this just another example of free market forces?
Whatever the answer may be, Trump just retweeted on Twitter that “If GM doesn't want to keep their jobs in the United States, they should pay back the $11.2 billion bailout that was funded by the American taxpayer.” As Reuters further points out, the US government lost $11.2 billion on its GM bailout.
It invested about $50 billion to save GM because of its 2009 bankruptcy. For a time, it also held a 61 percent equity stake in the automaker. Beginning in late 2010, the US Treasury began selling GM stock and the final shares weren’t sold until December 2013. By that point, the government took an $11.2 billion loss. The government stated at that time it never intended to earn a profit, but rather to save the US auto industry by any means necessary. It was successful, obviously, but it came at a huge expense and political price. Earlier this week, Trump threatened to cut off all federal subsidies to GM, but that could prove difficult.
In fact, GM was already going to begin losing the $7,500 EV tax credit because it’ll soon reach its subsidy limit. The point being is that there may not be much Trump can do to change GM CEO Mary Barra’s mind (or its shareholders). GM vehicles including the Chevrolet Cruze, Bolt, and Impala, and Cadillac CT6 have received death notices due to sluggish sales. But this how a free market economy works. If something doesn’t sell, no matter how good the product maybe, it’s discontinued. Problem for those who build these vehicles is that GM, at least for now, has no use for those factories – and that is what Trump wants to see changed.