Trump threatens to revoke GM subsidies after its layoff, shutdown plans

WASHINGTON - US President Donald Trump on Tuesday threatened to deprive automaker General Motors (GM) of "all subsidies," one day after the company announced plans to lay off workers and close factories in North America and beyond.

"Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland," Trump tweeted. "The US saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including for electric cars."

US media assumed that the president was probably referring to the 7,500- US-dollar tax breaks the US federal government grants to consumers buying electric vehicles. CNN cited people familiar with the matter as saying the company was unaware of other federal incentives it is receiving beyond that.

Ending the subsidy, however, will require the passage of a new law in Congress.

GM announced on Monday that it would slash over 14,000 jobs and effectively close five assembly and propulsion plants in the United States and Canada in 2019, a reorganization plan Barra said would continue to make the company "highly agile, resilient and profitable."

In addition to a previously announced factory closure in South Korea, GM said it would also cease operations of another two unspecified plants outside North America by the end of 2019. Combined, the company estimated that the measures will save as much as 6 billion US dollars.

If carried out, Trump's threat would deal a blow to one of the company's strategy priorities. "Resources allocated to electric and autonomous vehicle programs will double in the next two years," GM said in Monday's statement.

GM, whose two models currently qualify for the federal tax subsidy for electric and hybrid cars, have joined other automakers in lobbying Congress to lift a 200,000-vehicle limit beyond which the tax break will gradually phase out. As of the third quarter of 2018, the company has less than 4,000 vehicles to produce to reach the threshold.

GM issued a separate statement Tuesday defending its commitment to US manufacturing sector. "GM is committed to maintaining a strong manufacturing presence in the US, as evidenced by our more than 22-billion-dollar investments in US operations since 2009."

"Yesterday's announcements support our ability to invest for future growth and position the company for long-term success and maintain and grow American jobs," it added.

Top White House economic adviser Larry Kudlow talked with Barra in a pre-arranged meeting on Monday, but GM declined to comment on it.

At a White House press briefing Tuesday, before Trump sent the tweet, Kudlow mentioned the electric vehicle credit.

"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 said.