General Motors (GM) stock fell on Tuesday after US President Donald Trump stepped up his attack on the company, threatening to cut all subsidies after the automaker announced thousands of jobs cuts and closure of several plants across North America.
“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China,” Trump tweeted on Tuesday, adding: “We are now looking at cutting all @GM subsidies, including for electric cars.”
“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. I am here to protect America’s Workers!”
“The U.S. saved General Motors, and this is the THANKS we get!” Trump tweeted, a reference to the taxpayer-funded bailout that helped GM after the recession a decade ago.
On Tuesday, White House Press Secretary Sarah Huckabee Sanders told reporters that she was not aware of a specific timeline for cutting the subsidies, but added that Trump is looking into the matter.
After the President’s comments, the GM share fell by 3.8 per cent and closed down 2.6 per cent, wiping out much of the gains of Monday when it soared after the company announced its restructuring plans that involved closure of five plants in the US and Canada and slashing of over 14,000 jobs.
{{/usCountry}}After the President’s comments, the GM share fell by 3.8 per cent and closed down 2.6 per cent, wiping out much of the gains of Monday when it soared after the company announced its restructuring plans that involved closure of five plants in the US and Canada and slashing of over 14,000 jobs.
{{/usCountry}}GM has said the moves are designed to prepare the company for a future of driverless and electric vehicles. It is also responding to a consumer shift away from sedans in favor of trucks and SUVs, CNN reported.
It is, however, not clear what subsidies Trump was referring to. The CNN report said “GM is unaware of any significant federal subsidies the company is receiving beyond a $7,500 plug-in tax credit, which goes to the consumer, not the company”.
In a statement, GM said it remains committed to “maintaining a strong manufacturing presence in the US”. It pointed to more than $22 billion of investments in domestic operations since 2009 and noted that the restructuring plan is aimed at supporting future growth and long-term success. It said many affected workers could shift to other plants.
“We appreciate the actions this administration has taken on behalf of industry to improve the overall competitiveness of U.S. manufacturing,” the GM statement said.