Thu, Nov 29, 2018 - Page 10 News List

Trump threatens to cut GM subsidies over mass layoffs

Reuters, WASHINGTON

A banner depicting a Chevrolet Cruze hangs from General Motors Co’s plant in Lordstown, Ohio, on Tuesday.

Photo: AP

US President Donald Trump on Tuesday threatened to cut subsidies for General Motors Co (GM) after the largest US automaker said it would halt production at five plants in North America and cut nearly 15,000 jobs.

“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 said on Twitter.

Trump has made boosting auto jobs a key priority during his almost two years in office and has often attacked automakers on Twitter for not doing enough to boost US employment.

GM electric vehicles are eligible for a US$7,500 tax credit under federal law, but it is not clear how the administration could restrict those credits or if Trump had other subsidies in mind.

GM CEO Mary Barra spoke to Trump over the weekend to discuss the cuts and was at the White House on Monday to meet with US National Economic Council Director Larry Kudlow.

Trump also criticized GM’s decision to not close facilities in Mexico or China.

“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!” Trump wrote on Twitter.

GM currently builds just one vehicle in China that it exports to the US — the Buick Envision, of which it had sold about 22,000 through September.

GM sold nearly 2.7 million vehicles in China through September, nearly all of them built in China for that market.

White House spokeswoman Sarah Huckabee Sanders told reporters that the president is looking at options.

“The president wants to see American companies build cars here in America, not build them overseas, and he is hopeful that GM will continue to do that here,” she said.

GM has been lobbying the US Congress, along with Tesla Inc, to lift the current cap on electric vehicles eligible for tax credits, but any action by Congress before next year is a long shot, congressional aides said.

Under current law, once a manufacturer sells 200,000 electric vehicles, the tax credit phases out over time starting in the following quarter.

GM has said it expects to hit the 200,000-vehicle threshold by the end of this year.

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