Trump warns US may cut off General Motors subsidies after job cuts

VIDEO: REUTERS
GM electric vehicles are eligible for a US$7,500 (S$10,330) tax credit under federal law, but it is not clear how the administration could restrict those credits.
GM electric vehicles are eligible for a US$7,500 (S$10,330) tax credit under federal law, but it is not clear how the administration could restrict those credits.PHOTO: REUTERS

WASHINGTON (REUTERS) - United States President Donald Trump said the White House was looking at cutting subsidies for General Motors Co after the largest American automaker said it would halt production at five plants in North America and lay off thousands of workers.

"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," Mr Trump said on Twitter on Tuesday (Nov 27).

GM electric vehicles are eligible for a US$7,500 (S$10,330) tax credit under federal law, but it is not clear how the administration could restrict those credits or if the President had other subsidies in mind. GM shares fell on Mr Trump's tweets and were recently down 2.4 per cent.

GM declined to immediately comment.

Mr Trump criticised GM on Twitter for not closing facilities in Mexico or China.

White House spokesman Sarah Sanders told reporters on Tuesday that the President is looking into options.

"The President wants to see American companies build cars here in America not build them overseas and he is hopeful that GM will continue to do that here," she said.

 
 
 

The company announced on Monday that it will halt production at one Canadian plant and four US factories, including the Detroit-Hamtramck Assembly plant that builds the plug-in hybrid electric Chevrolet Volt. GM is ending production of six vehicles, including the Volt, as it cuts more than 6,500 factory jobs.

GM confirmed on Tuesday that 2,250 salaried workers had applied for buyouts. The company said on Monday that it plans to cut about 8,000 of its 54,000 salaried workers in North America. The company plans to lay off thousands of salaried workers in January.

Mr Trump told GM on Monday it had "better" find a new product for Lordstown Assembly plant in Ohio that will halt production in March. GM has said sagging demand for small cars largely prompted the cuts.