Donald Trump might pull the plug on electric car credits in wake of GM layoffs
President Trump threatened Tuesday to cut off federal subsidies for General Motors in response to the automaker’s decision to shut down production at plants in Ohio and Michigan.
A day after GM announced the closings and layoffs of up to 14,000 workers in North America, the president and top White House economic adviser Larry Kudlow said the administration was considering punishment for the automaker, which received billions of dollars in a taxpayer bailout in 2008 and a hefty corporate tax cut this year.
“There’s a lot of disappointment, even anger,” Mr. Kudlow told reporters in the White House press room. “We are going to be looking at certain subsidies regarding electric cars and others, whether they should apply or not. That reflects the president’s own disappointment.”
Before the press briefing ended, Mr. Trump, who was nearby in the West Wing, took his anger at GM a step further by threatening to cut off all government aid for the company.
“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland,” the president tweeted. “Nothing being closed in Mexico China. The U.S. saved General Motors, and this is the THANKS we get! 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!”
Shares of GM extended declines after Mr. Trump’s Twitter posts, falling 2.55 percent to $36.69 by the closing bell. GM said its restructuring will save the company $6 billion by 2020.
The federal government offers tax credits of up to $7,500 to lower the upfront costs of plug-in electric vehicles. The credits start to phase out after a manufacturer has sold 200,000 electric cars; automakers are lobbying Congress to lift that restriction.
Eliminating the tax credits would take legislation. It’s not clear what other federal aid the president could revoke unilaterally.
White House press secretary Sarah Huckabee Sanders said the president is “looking into what those options might look like” to convince GM of its mistake.
“The president wants to see American companies build cars here in America, not build them overseas,” she said. “And he is hopeful that GM will continue to do that here.”
The president has made the resurgence of American manufacturing a centerpiece of his economic plan. Since Mr. Trump’s inauguration, U.S. manufacturers have added nearly 400,000 jobs, the strongest level of factory job growth in more than 20 years.
GM said its decision wasn’t based on the overall economy but on lower demand for certain car models, including the electric Chevrolet Volt and Bolt. The automaker also didn’t blame Mr. Trump’s tariffs on imported steel and aluminum.
The company’s decision has the potential to affect the 2020 presidential election. Mr. Trump won Ohio and Michigan two years ago.
Sen. Sherrod Brown of Ohio, a potential Democratic presidential candidate, called the decision “corporate greed at its worst” and blamed provisions in the tax law that allow companies to pay lower tax rates on overseas earnings than they pay on U.S. profits.
Mr. Brown said he wants Congress to repeal that provision in another tax bill before adjourning for the year.
“This bill is meaningless unless [Mr. Trump] actually addresses the real issues of the day,” Mr. Brown said. “I can’t think of anything more important.”
The Democratic National Committee said GM received a $157 million “windfall” from corporate tax cuts enacted in late 2018.
The president, who campaigned in Ohio this year in an unsuccessful effort to defeat Mr. Brown, blamed the lawmaker for GM’s action.
“Ohio wasn’t properly represented by their Democrat senator, Senator Brown, because he didn’t get the point across [to GM],” Mr. Trump told The Wall Street Journal. “But we will all together get the point across to General Motors. And they better damn well open up a new plant there very quickly.”