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US President Donald Trump has threatened General Motors to withdraw federal grants in his Twitter entry on Twitter. The reason for Trump's anger is GM's decision to close its plants in the states of Maryland, Michigan, and Ohio.
"I am very disappointed with General Motors and its general manager, Mary Barra, because of the closure of factories in Ohio, Maryland and Michigan," Donald Trump wrote on Twitter. "We intend to remove all subsidies to GM, including subsidies for the production of electric cars," he added.
Exemptions and transfer of production
Following General Motors' decision to close production facilities in three states, two of which – Ohio and Michigan played a key role in Donald Trump's election to the presidency at the time. In the 2016 election, jobs will lose at least 14,000 jobs. employees.
In addition, GM plans to transfer the production of its popular car models to Mexico and China and completely abandon the production of certain types of cars, such as less popular sedans.
Investor reaction
GM's actions in response to Trump's threat to deprive the largest US automaker of federal subsidies, which in the past, during the Great Recession of 2009, saved this auto giant from the disaster, lost 2.55 % on the New York Stock Exchange on Tuesday.
However, auto market analysts have not been able to say what federal Trump subsidies wanted to reduce GM because the Detroit group currently does not use any federal subsidy. The only support indicated by the experts concerns tax breaks when buying electric cars for 7.5 thousand. dollars. However, all buyers of new electric cars benefit from such discounts, but not the producers of these cars.
Investments around the world
In a statement issued in response to the president's tweet, General Motors' board of directors said that since 2009, this company, with production facilities in 34 countries around the world, including Poland in Silesia, has invested more than 22 billion USD in the United States. The company, it was said in a statement from GM management, still intends to maintain "a strong manufacturing presence in the United States."
In a statement, GM was explaining its decision to abandon unprofitable production of certain car models and shut down its factories in three states – as the experts pointed out – did not mention the measures retaliating tariffs introduced by President Trump in June.
According to experts, the introduction in the United States of 25% steel duties and 10% on imported aluminum has led to an increase in production costs in the US automotive sector of nearly $ 1 billion. per year, resulting in an average price increase of $ 400 for new cars.
Customs tariffs and the escalation of the trade dispute with China, one of the largest recipients of cars manufactured in the United States, are indicated by other automakers, such as Ford Motor Company, who have moved or intend to transfer their production from the United States to another country.
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