Published: Wed, November 28, 2018
Finance | By Cynthia Curry

Trump threatens to cut General Motors subsidies as carmaker axes jobs

Trump threatens to cut General Motors subsidies as carmaker axes jobs

GM Chief Executive Officer Mary Barra made calls early on Monday to disclose the plan. He said he told the company that the United States has done a lot for GM and that if its cars aren't selling, the company needs to produce ones that will.

The affected vehicles at the North American plants include the Cadillac XTS and CT6, Chevrolet Impala, Cruze and Volt and the Buick LaCrosse.

The job cuts from GM's current 180,000-strong work force will be particularly stinging in politically crucial areas of OH and MI, a region US President Donald Trump has promised to revive. GM went on to say it plans to add new technical and engineering jobs to support future electric and autonomous vehicles.

The U.S. government gives auto companies a $7,500 federal tax credit for every electric vehicle that GM sells, up to 200,000 vehicles. Some 75 percent of its global sales will come from just five vehicle architectures by the early 2020s.

Senator Sherrod Brown, an Ohio Democrat, lambasted GM's move as "corporate greed at its worst" and also took a swipe at the 2017 tax cut favoured by Trump and congressional Republicans that boosted GM's profits and had been touted as a jobs victor.

President Donald Trump, who has made bringing back auto jobs a big part of his appeal to OH and other Great Lakes states that are crucial to his re-election, said his administration and lawmakers are exerting "a lot of pressure" on GM.

General Motors Chairman and CEO Mary Barra speaks at GM's press conference at the North American International Auto Show in Detroit, Jan. 16, 2018. In October, nearly 65 percent of new vehicles sold in the US were trucks or SUVs.

The U.S. automobile manufacturer announced Monday it plans to cease work on the Chevrolet Cruze at a Lordstown, Ohio, plant and on three Chevy, Buick and Cadillac models at a Detroit-Hamtramck facility in MI.

The announcement anxious GM workers who could lose their jobs.

Trump's belligerent approach to companies behaving in ways he feels make him look bad reveals his inclination toward an authoritarian view of politics and economics.

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The United Auto Workers, which represents USA workers, vowed to fight the cuts.

This story has been corrected to show that up to 14,000 workers could lose jobs, not 14,700. She said the company could increase its investments in electronic and autonomous vehicles.

Canadian Prime Minister Justin Trudeau said he spoke to Barra on Sunday to express his "deep disappointment" with the closure. "We're sick and exhausted of General Motors shipping all our jobs to Mexico", he said at a press conference in Oshawa, Ontario.

According to reports, the five North American plants concerned employ almost 7,000, including 3,000 workers in the Ontario company.

GM did not immediately comment on Trump's remarks, but the company noted it has other facilities in OH including a transmission plant in Toledo and metal center in Parma. "Can't say anything final about that, but we're looking into it". The fall in new auto sales has troubled auto makers at a time when mainstays of the industry - private ownership and the internal combustion engine - are threatened by plans for shared vehicle schemes and electric cars.

Wolikow, 36, who had bought a house two miles from the Lordstown plant, resisted seeking a transfer to another GM facility because he didn't want to uproot his family and still had hopes of returning to work. However, that subsidy ends after 200,000 electric vehicles are sold by a company.

GM opened the Lordstown plant in the late 1960s.

GM said it would phase out certain models of slower-selling cars, halting production at four factories in the U.S. and one in Canada.

Ms Keller added that boosting electric-car output will be important for the Chinese market.

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