President Donald Trump threatened on Tuesday to cut all General Motors subsidies after the automaker announced thousands of jobs cuts.
“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland,” Trump tweeted. “We are now looking at cutting all @GM subsidies, including for electric cars.”
GM (GM) stock declined 3% and fell to session lows on the comments.
Trump’s threat came a day after GM announced plans to cut 14,000 jobs and shut five facilities in North America. GM said the moves are designed to prepare the company for a future of driverless and electric vehicles. GM is also responding to a consumer shift away from sedans in favor of trucks and SUVs.
White House economic adviser Larry Kudlow said at Tuesday’s White House press briefing that he met with Barra on Monday to talk about the layoffs. “It’s a great disappointment, obviously,” he said.
Kudlow said the Trump administration will be looking into subsidies for “electric cars and others.” He did not specify how much GM receives in federal subsidies.
GM did not immediately respond to a request for comment.
The biggest federal subsidy for electric cars made by GM is about to go away on its own. And speeding its demise would hurt American car buyers.
The federal government provides a $7,500 federal tax credit for each plug-in vehicle purchased. However, this subsidy goes away once an auto maker reaches 200,000 electric cars sold. And GM may hit that threshold by the end of the year, making its 2019 and 2020 tax credits smaller.
Tesla (TSLA), the leading electric car maker, already hit the 200,000 milestone earlier this year. Its tax credit will start getting smaller on January 1.
The GM job cuts hurt Trump’s campaign promise to bring back American auto jobs.
“The U.S. saved General Motors, and this is the THANKS we get! Trump tweeted.
This is a developing story.
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