President Trump Slams GM for Plant Closures, Threatens Removal of All Subsidies
Statements from the President's economic advisor suggest that the White House may use GM's actions to rescind the Federal EV tax credit.
With General Motors being under the world's microscope after its Monday announcement of plant closures and job slashes, U.S. President Donald Trump publicly announced his disappointment in the automaker via Twitter on Tuesday. In addition to expressing his displeasure, Trump also noted that he would be investigating pulling all subsidies for GM, including any federal subsidies for its upcoming electric vehicles.
Trump cites the 2008 bailout of the U.S. auto industry where General Motors and Chrysler relied heavily on government funding in order to stay afloat amid troubling times. Though GM did pay back its loan from the Troubled Asset Relief Program, the U.S. still posted a net loss of $11.2 billion in 2014 after cashing out its financial stakes purchased from GM during the early stages of the bailout.
Another avenue approached by the President is the revocation of all Federal electric car subsidies which are made available to the automaker. It's not clear which subsidies, in particular, Trump is targeting. However, it is believed that the tweet may be in reference to the $7,500 Electric Vehicle (EV) tax credit, a benefit made available for consumers who purchase an electric vehicle from an automaker and become an early adopter for a brand. Once a manufacturer surpasses 200,000 vehicle deliveries, the tax credit becomes phased out over the next calendar year. GM has been expected to hit the federal threshold of 200,000 deliveries by the end of 2018, something which rival automaker Tesla has already accomplished earlier this year.
Trump would not be able to immediately revoke this public-facing subsidy without enacting an unchallenged executive order or convincing Congress to pass legislation on the matter.
On Tuesday, Trump’s top economic adviser, Larry Kudlow, chimed in on the matter when speaking with reporters prior to a White House briefing. Statements from Kudlow suggest that the White House may attempt to use GM's announcement of plant closures as a window to disassemble the EV tax credit as a whole, something which has been unsuccessfully attempted in Washington several times this year.
“We are going to be looking at certain subsidies regarding electric cars and others, whether they should apply or not. I can’t say anything final about that, but we’re looking into it,” Kudlow said to the press.
GM's announcement of closing five North American plants include four factories in the United States and one in Canada. Collectively, the action is estimated to cost as many as 14,000 jobs with more than 6,700 being factory workers.