Trump threatens to cut GM subsidies in retaliation for job cuts in the United States

By David Shepardson

WASHINGTON (Reuters) – US President Donald Trump on Tuesday threatened to scrap subsidies for General Motors Co after the largest US automaker announced that production at five plants in North America would be halted and nearly 15,000 jobs would be deleted.

"The United States has saved General Motors and we are delighted! We are now considering removing all @GM subsidies, including … for electric cars," Trump said on Twitter.

During his nearly two years in office, Trump has made strengthening jobs in the automotive industry one of his top priorities and has often attacked automakers on Twitter for not doing enough to boost employment in the auto industry. United States.

Federal law allows GM electric vehicles to benefit from a $ 7,500 tax credit, but it is unclear how the administration could restrict these credits or whether Trump was considering other subsidies. GM's shares fell after Trump's tweets and lost 2.6% at the end of the session.

GM said in a statement that it was "determined to maintain a strong manufacturing presence" in the United States after investing $ 22 billion in operations here since 2009 and creating new jobs in the US. electrification and autonomous vehicles.

The cuts will "position the company for long-term success and maintain and expand US jobs," GM said, adding that many affected plant workers would be able to move to other GM plants.

GM chief executive Mary Barra spoke with Trump over the weekend to discuss discounts and went to the White House on Monday to meet with economic advisor Larry Kudlow.

Kudlow told reporters Tuesday that the administration had helped GM enforce energy efficiency standards and other regulations.

"We did this to help you and I think his disappointment is that he looks like he's turned his back on them," said Kudlow.

Trump also blamed GM for not closing its facilities in Mexico or China.

"General Motors made a big bet on China a few years ago, when building factories (and Mexico) .Do not believe this bet will bring money." I'm here to protect American workers! " Trump wrote on Twitter.

At present, GM is building only one vehicle exported to the United States to China: the Buick Envision and has sold about 22,000 until September. GM sold nearly 2.7 million vehicles in China until September, with almost all of them being built in China for the market.

White House spokeswoman Sarah Sanders told reporters on Tuesday that the president was reviewing the options.

"The president wants American companies to build cars here in America and not abroad and he hopes GM will continue to do that here," she said.

GM has lobbied Congress, along with Tesla Inc., to lift the current cap on electric vehicles eligible for tax credits, but any congressional action before 2019 is a long struggle, congressional advisers said.

Under current legislation, when a manufacturer sells 200,000 electric vehicles, the tax credit disappears gradually as of the following quarter. GM has announced its intention to reach the threshold of 200,000 vehicles by the end of the year. Tesla reached the ceiling in July.

GM announced Monday the shutdown of production at a Canadian plant and four US plants, including the Detroit-Hamtramck assembly plant, which is building the Chevrolet Volt electric hybrid. GM ends production of six vehicles, including the Volt, which cuts more than 6,500 factory jobs.

GM will continue to build the electric Chevrolet Bolt in Michigan.

Trump told GM Monday that it was "better" to find a new product for the Lordstown Assembly plant in Ohio that will stop production in March. GM said the decline in demand for small cars had largely motivated the cuts, but also raised factors such as higher US tariffs on steel and aluminum.

GM has announced plans to close two unnamed factories outside of North America by the end of 2019.

(Report by David Shepardson, additional report by Roberta Rampton, edited by Chizu Nomiyama and Lisa Shumaker)

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