President Donald Trump on Tuesday threatened to cut subsidies to General Motors over the automaker’s plans for layoffs and factory shutdowns.
“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland,” Trump tweeted Tuesday. “Nothing being closed in Mexico & China. The US saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including for electric cars.”
GM on Monday announced that the company planned to stop producing vehicles at three factories — one apiece in Michigan, Ohio, and the Canadian province of Ontario — and lay off as many as 15,000 workers by the end of 2019. Additionally, the company plans to shutter engine factories in Maryland and Michigan. The automaker said the changes were necessary to adjust to changes in the industry.
The company’s announcement was blasted by Trump and lawmakers of both parties. In an interview with The Wall Street Journal on Tuesday, Trump seemed to threaten the company if a new plant in Ohio were not opened shortly.
“They better damn well open a new plant there very quickly,” Trump said.
While it wasn’t immediately clear which subsidies Trump had in mind, GM cited a shift toward electric cars in Tuesday’s announcement. GM customers receive a $7,500 tax credit when purchasing a fully electric vehicle from the company, but that credit is due to shrink to $3,750 once an automaker has manufactured more than 200,000 electric cars. GM will pass that threshold in 2018, meaning consumers are already in line to get a smaller credit next year.
Trump’s comments came shortly after Larry Kudlow, Trump’s top economic adviser, suggested that the White House could try to prevent the layoffs and factory shutdowns by making adjustments to incentives GM receives from the government.
“There is disappointment that they would rather build cars in China rather than the United States,” Kudlow told reporters at a White House press briefing on Tuesday. “We are going to be looking at certain subsidies regarding electric cars and others, whether they should apply.”
Also Tuesday, Trump blasted GM’s decision to build factories outside the US.
“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,” Trump said. “I am here to protect America’s Workers!”
Following Trump’s tweet, shares of GM fell to their lowest point of the day, trading down roughly $1 a share, or 2.6%, as of 2:25 p.m. ET.