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President Trump threatens to cut GM subsidies amid layoffs, plant closures

GM will cut as many as 14,000 workers in North America

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(Bill Pugliano/2015 Getty Images)

WASHINGTON – President Donald Trump tweeted on Tuesday about the layoffs and plant closures announced by General Motors on Monday.

Pres. Trump tweeted:

Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. 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!

  • What's a subsidy? It's defined as sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.
  • Context: Subsidies for electric vehicles phase out once a manufacturer has sold 200,000 qualifying vehicles. General Motors is expected to cross the phase-out threshold before the end of 2018.

The GM layoffs come amid the backdrop of a trade wars between the U.S., China and Europe that likely will lead to higher prices for imported vehicles and those exported from the U.S. CEO Mary Barra said the company faces challenges from tariffs but she did not directly link the layoffs to them.

GM announced Monday that it will cut as many as 14,000 workers in North America and put five plants up for possible closure.

At the factories, around 3,300 blue-collar workers could lose jobs in the U.S. and another 2,600 in Canada, but some U.S. workers could transfer to truck or SUV factories that are increasing production. The cuts mark GM's first major downsizing since shedding thousands of jobs in the Great Recession. The reductions could amount to as much as 8 percent of GM's global workforce of 180,000 employees.

The cuts include about 8,000 white-collar employees, or 15 percent of GM's North American white-collar workforce. Some will take buyouts while others will be laid off.

The restructuring is part of a shift by GM as it abandons many of its car models and focuses more on autonomous and electric vehicles.

It's the new reality for automakers that are faced with the present cost of designing gas-powered cars and trucks that appeal to buyers now while at the same time preparing for a future world of electric and autonomous vehicles.
 


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