Trump warns United States may cut off GM subsidies

Trump warns United States may cut off GM subsidies

Trump warns United States may cut off GM subsidies

General Motors announced that it would be laying off 14,700 workers, including 6,000 factory workers, and closing down four plants in the United States and one in Canada. A day earlier, Trump issued a vague threat to GM warning it to preserve a key plant in the presidential bellwether state of OH, where the company has marked its Lordstown plant for closure.

"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. I am here to protect America's Workers!"

The union went on to note that products - such as the Chevrolet Blazer and Buick Envision - which could have been built in the affected plants are instead produced in Mexico and China.

Mr Trump's incendiary tweets 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 Barra on Monday, said that Trump felt betrayed by GM, which the government had been trying to help. "We appreciate the actions this administration has taken on behalf of industry to improve the overall competitiveness of USA manufacturing", the statement said.

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

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.

White House press secretary Sarah Huckabee Sanders said that she did not have any additional information on the president's threat.

GM electric vehicles are eligible for a $US7,500 ($A10,382) tax credit under federal law, but it is not clear how the administration could restrict those credits or if he had other subsidies in mind.

The company said the cuts - 2,500 jobs in Oshawa, GM's Canadian heartland, as well as 3,300 production workers in the US and 8,000 salaried staff - are part of a dramatic course correction aimed at better positioning GM for the dominance of electrified, interconnected and automated automobiles. 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.

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

The restructuring reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. At a rally near GM's Lordstown plant last summer, Trump told people not to sell their homes because the jobs are "all coming back".

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.

GM said it has invested more than $22 billion in US operations since 2009, when it exited bankruptcy protection. That figure was about 50 per cent cars just five years ago.

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