Trump Threatening GM’s Electric Car ‘Subsidies’ Over the Plant Closures

GM is closing at least four U.S. plants and one in Canada and slashing its workforce by 15 percent—about 14,000 people—while things are relatively “good” as it prepares to invest more heavily in electric cars and autonomous technology.
And perhaps even worse, Trump’s Director of the National Economic Council and Man Who Is Always Wrong About Everything All The Time Always Like How Can One Person Just Constantly Be Consistently Wrong About Everything, Larry Kudlow, implied to White House reporters that Trump is really just going to use this whole GM thing to scrap not just subsidies for GM’s electric cars, but ALL electric cars (via The Hill):
“We are going to be looking at certain subsidies regarding electric cars and others, whether they should apply or not. I can’t say anything final about that, but we’re looking into it,” Kudlow told reporters in a White House briefing before Trump’s tweet.
“Again, that reflects the president’s own disappointment regarding these actions,” he said of the plant closings.
From a business perspective, GM’s moves make sense. Historically the company had to be dragged kicking and screaming into making any sort of cuts, layoffs, or just generally good decisions. This is a rare example of GM getting ahead of the curve, and a possible economic downturn in 2019, instead of being broken and bloated when it has to beg for another federal taxpayer bailout.
And, hell, some of the plants being closed made cars that people have all but stopped buying, thanks to a shift in consumer demand. The Lordstown, Ohio plant makes one car, and one car only—the Chevrolet Cruze—on just one shift. It employs about 1,500 people, down from the 4,500 workers it had just a few years ago. Its fate was probably written a long time ago.
But as with all things in capitalism, it sucks the most for workers, and while the plant closures don’t happen until early next year (and the unions will fight against them) it’s just the kind of shitty right-before-the-holidays news that really makes you feel like trash deep down inside.
And as we noted in today’s Morning Shift, these cuts are happening in Michigan and Ohio, places that were strongholds for Trump in the 2016 election, and places he promised jobs were coming back to. Take this, from Bloomberg:
President Donald Trump said he expects General Motors to keep an Ohio assembly complex open after its production of the Chevrolet Cruze ends early next year. Bryan Keeley said he wants to believe it, but he’s heard talk like that before.
Keeley is one of the thousands of workers at GM’s Lordstown factory near Youngstown who learned that the plant is being idled in March, with no new production promised. He said he voted for Trump two years ago because of the Republican’s vow to help American workers.
“I thought he was going to do miracles for us, so did a lot of other autoworkers,’’ Keeley, 46, said outside Ross’ Eatery and Pub near the plant. Keeley has worked for GM for 26 years but has been laid off since June. “He needs to step up to the plate and do what he said.’’
And this:
Tommy Wolikow, a Lordstown resident who said he was laid off from the plant on the day Trump was inaugurated last year, has been attending his rallies with the Good Jobs Nation coalition to bring attention to the plight of workers. He said the first political rally he attended was the one last year in Youngstown where Trump told voters not to sell their homes.
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.
Now, unable to find another job and maxing out his credit cards, he’s put in for a transfer and isn’t sure he can trust Trump’s assurances the plant will remain open. “It’s hard to keep on thinking that he’s going to fight for us,’’ Wolikow said.
It’s heartbreaking stuff even if the Cruze wasn’t selling well. And it’s no wonder these people think this way, when the president said exactly this in Ohio back in 2017, and similar things when on the 2016 campaign trail:
“They’re all coming back. They’re all coming back. Don’t move, don’t sell your house,” the president said during a July 2017 visit to Youngstown, Ohio. “We’re going to fill up those factories or rip them down and build new ones.”
So Trump’s in a shitty spot here, and the answer, apparently, is to “[cut] all GM subsidies including for electric cars.” That is... definitely a response! That would do the opposite of saving American factory jobs!
As with all things Trump, one wonders next: “Can he even... do that?” And as of this evening, that remains unclear. He’s even kind of wrong when he uses the word “subsidies.” Presumably, the president is referring to the $7,500 tax credit on electric vehicles. But even then, those are capped at 200,000 cars per manufacturer. And GM, having been selling EVs and plug-in hybrids for years now, is due to hit that limit pretty soon. In theory the president could “kill” them early, but... why, other than as a gift to oil companies, which would be very on-brand for him? Would that even sway GM to reverse its decision on the Ohio plant? Doubtful!
We must also point out that this is a mess partially of Trump’s own making. Yes, GM is cutting plants and jobs for lots of reasons, like the shift to SUVs and our nebulous future. But it’s also taken a financial hit thanks to Trump’s tariffs on imported aluminum and steel (those have cost Ford about $1 billion as well this year) and GM has warned for months that such tariffs could cause cuts and job losses. They may not have been a huge reason for the job cuts, but they remain a factor. Even scarier is the looming trade war between the U.S. and China over other tariffs.
GM, of course, isn’t some hapless victim here, as it didn’t reinvest its generous Trump corporate tax cut into American jobs, which politicians on both sides of the aisle are furious about. Is the answer here to cut GM’s electric car tax breaks? Or even to slash all electric car tax breaks, which at this point in human events would be just deranged? Probably not, but backing off on this pointless and disruptive trade war may be a better one.

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