Trump 'very disappointed' about GM cuts, threatens to cut off subsidies

FLINT (WJRT) (11/27/18) - President Trump is among many people concerned and unhappy about General Motors' plans announced Monday to cut 14,000 jobs and close up to five plants.

The Associated Press reported that Trump's administration threatened to cut off all federal subsidies to GM. Trump is especially concerned with how the cuts will affect the Midwest, where he campaigned on promises of an manufacturing rebirth.

"Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland" while sparing plants in Mexico & China, Trump tweeted, adding: "The U.S. saved General Motors, and this is the THANKS we get!"

Trump's tweets followed a short time after National Economic Council Director Larry Kudlow said the White House's reaction to the automaker's announcement was "a tremendous amount of disappointment, maybe even spilling over into anger."

Kudlow, who met with Barra on Monday, said Trump felt betrayed by GM.

"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, referencing the recently negotiated U.S.-Mexico-Canada trade agreement. "We've done this to help you and I think his disappointment is, it seems like that they kind of turned his back on him."

GM issued a statement in response to the criticism Tuesday reaffirming its commitment to providing jobs and opportunity in the United States, pointing out the restructuring is necessary to remain profitable.

"GM is committed to maintaining a strong manufacturing presence in the U.S., as evidenced by our more than $22 billion investments in U.S. operations since 2009," the statement says.

Monday's announcements "support our ability to invest for future growth and position the company for long-term success and maintain and grow American jobs," GM Corporate Communications official Pat Morrissey wrote in the statement.

He thanked the Trump administration for helping the auto industry and GM remain competitive in the global market.

University of Michigan-Flint Economics Department Chairman Chris Douglas said GM's latest round of cuts mirrors the company's continued decline in market share.

"This is not unexpected, in that, if you look at General Motors' market share, it's fallen every year, post bankruptcy," he said.

Douglas said the cuts to GM's sedan and car business while refocusing assets on advanced vehicle technology are moves the company needed to make for its long-term health.

"General Motors had a lot of overhead before the bailout, so they're able to shed that overhead so that they can be profitable at a lower market share," Douglas said. "But their market share has continued to decline, so now they have even more overhead they have to shed, which is why you're seeing five factories close."

Two of the factories on the chopping block are in Michigan: Detroit- Hamtramck Assembly and Warren Transmission Operations.

"Fourteen thousand jobs is just a drop in the bucket to 150 million jobs nationwide, so it's not going to cause a recession or a slowdown in the economy," Douglas said. "It just kind of makes people worry."

The UAW Local 659 president was still working to gather information about GM's plans and declined to comment Tuesday.

The Associated Press contributed to this report.



 
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