Sections

ideals
Business Essentials for Professionals

Trump Threatens General Motors Of Stopping Federal Subsidies


11/29/2018


Trump Threatens General Motors Of Stopping Federal Subsidies
Following the announcement by the largest car marker of the United States to cut thousands of jobs in North America and stopping production of slow selling models, US president Donald Trump issued a threat of cutting off all forms of federal subsidies to General Motors, amidst debate about his presidential powers ot do so.
 
The bulk of the planned job cuts at GM would take place in the Midwest which is a politically sensitive region and where a promise of reviving the manufacturing sector was made by Trump. The comments about GM were made by the president over twitter. It is also the latest incident of the efforts of Trump to interfere in the affairs of a preview business entity and the threats of using government power to make such private companies later their business decisions.
 
"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. "The U.S. saved General Motors, and this is the THANKS we get!"
 
His administration was "looking at cutting all GM subsidies, including for electric cars," he added.
 
The tweet by Trump was preceded by a comment of National Economic Council Director Larry Kudlow who said that the White House's reaction to the announcement buy GM was "a tremendous amount of disappointment, maybe even spilling over into anger." Trump felt betrayed by GM, Kudlow also said.
 
"Look, we made this deal, we've worked with you along the way, we've done other things with mileage standards, for example, and other related regulations," Kudlow said, referring to the recently completed remaking of the U.S.-Mexico-Canada trade agreement. "We've done this to help you and I think his disappointment is it seems like they kind of turned their back on him."
 
It was a day earlier that Trump had also issued a veiled threat to GM with respect to keeping the company’s plant in the state of Ohio, a crucial presidential bell weather state, open after GM had indicated that the plant could be closed down. 
 
"That's Ohio, and you better get back in there soon," Trump had said.
 
With reference to the latest threat by Trump against GM, analysts could not specify the action that the president could or would take against GM or when that could be taken or even whether Trump possessed the authority to take such measures without approval from the US Congress.
 
Those customers in the US who purchase electric vehicle manufactured by GM and other car makers are granted a federal tax credit of up to $7,500 which essentially brings down the price of the cars. The intention of such as a policy is to encourage as many zero emission electric cars as possible to hit the US roads. However, it is estimated that GM is very close to exhausting its subsidy limit quota .
 
Reacting to the Trump threat, GM attempted to please the president while also trying to justify its decison of price cuts and reorganization. "We appreciate the actions this administration has taken on behalf of industry to improve the overall competitiveness of U.S. manufacturing," the car maker said in a statement.
 
(Source:www.chicagotribune.com)