US President Donald Trump on Tuesday threatened to cut automaker General Motor (GM)’s federal subsidies, including for electric cars, in retaliation against its decision to shut many production plants and reduce close to 150,000 jobs, almost 15 per cent of its salaried workforce.
“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico and China. The US saved General Motors, and this is the THANKS we get!” Trump tweeted. “We are now looking at cutting all @GM subsidies, including for electric cars.”
“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,” he added. “I am here to protect America’s Workers!,” he tweeted.
Earlier, Trump told The Wall Street Journal in an interview that he had spoken with GM CEO Barra on Sunday night to discuss the downsizing plan. He told her that GM should stop making cars in China and open a new plant in Ohio to replace the ones being closed.
“They better damn well open a new plant there very quickly," Trump told the Journal. "I love Ohio," Trump said. "I told them, you're playing around with the wrong person,'" he added, according to the newspaper.
Consumers in US, who buy full electric cars, can avail a federal tax credit of $7,500. The subsidy has its origin in the 2009 stimulus bill by the Obama administration. Credit subsidy was established as an incentive to push more electric vehicles on the road. The credit currently phases out after an automaker sells 200,000 such cars. The subsidy was extended in the 2017 Republican tax Bill Trump signed last year.
Tesla already hit the 200,000-car mark in July. GM is expected to reach it by the end of the year. The subsidy has allowed GM to keep the post-credit starting price of its Chevrolet Bolt electric car at around $30,000.
Tesla, GM, and Ford have been lobbying lawmakers to lift the cap or get rid of it altogether. In a statement released after Trump’s tweets on Tuesday, GM said it is “committed to maintaining a strong manufacturing presence in the US,” adding that many of the US workers affected by its plant closings may be shifted to other GM plants. The company said it appreciates “the actions this administration has taken on behalf of industry to improve the overall competitiveness of US manufacturing.”
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