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Trump threatens to end subsidies to GM for electric cars over layoffs

GM said it would end production at five North American plants, including Lordstown, Ohio, and cut 15 percent of its salaried workforce. Following this announcement, President Donald Trump threatened to cut all government subsidies to GM, causing GM's stock to fall. (Jeff Swensen/Getty Images)

President Donald Trump threatened on Twitter to end government subsidies for General Motors in retaliation for layoffs the company announced Monday.

What layoffs?

General Motors announced that it would be laying off 14,700 workers, including 6,000 factory workers, and closing down four plants in the United States and one in Canada.

While GM, and other car companies, have spoken out against rising production costs caused by the Trump administration's protectionist tariffs, a spokeswoman for the company told TheBlaze that the layoffs and plant closures “are being made as part of our ongoing transformation and are not related to recent trade or tariff decisions."

On a conference call, GM CEO Mary Barra said that the company is “taking this action now while the company and the economy are strong to keep ahead of changing market conditions."

Barra said that the goal was to make the company more efficient. GM's stock rose 5.5 percent after this announcement.

After Trump weighed in on Twitter, the company's stock dropped 3 percent.

What did Trump say?

Speaking to reporters Monday, Trump said that he was “not happy" about the decision. He said he had talked to Barra and informed her that “this country's done a lot for General Motors" and that the company needed to “get back in there soon."

Trump was more forceful in two tweets he sent Tuesday afternoon, saying that he was “very disappointed" in GM and Barra, and that his administration was “now looking at cutting all @GM subsidies, including for electric cars." “I am here to protect America's Workers!" he declared.

The U.S. government gives car companies a $7,500 federal tax credit for every electric vehicle that they sell, up to 200,000 vehicles.

What else?

In a news conference earlier Tuesday, White House economic adviser Larry Kudlow said he met with Barra and the two had a “lengthy conversation" about the layoffs.

“There's disappointment," Kudlow said, “that it seems like GM would rather build its electric cars in China rather than in the United States."

He said that the administration would be looking at certain electric car subsidies, but that he “can't say anything final about that."

He also stressed, however, that while the layoffs were “brutal" and “very disappointing," he did not think that they would “affect the overall economy."

One last thing…
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