After Cutbacks, Trump Threatens G.M. Over Electric-Car Subsidies – By Neal E. Boudette (nytimes.com) / Nov 27 2018
The White House signaled that the automaker could suffer for idling plants and reducing its factory work force.
When General Motors announced that it would idle five North American plants and eliminate thousands of jobs, it said the move would ease the burden of spending billions of dollars to develop the battery-powered vehicles of the future.
But the White House put a question mark over those plans on Tuesday when President Trump — irate over the G.M. cutbacks — threatened an end to federal tax credits that have helped underwrite that automaker’s electric-vehicle fleet.
“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland,” Mr. Trump said in a Twitter post. “Nothing being closed in Mexico & China.”
Apparently referring to G.M.’s federal rescue from bankruptcy in 2009, the president added: “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.”
And at a White House news briefing, Larry Kudlow, the director of the National Economic Council, said “there’s a lot of disappointment, even anger” in the administration over G.M.’s decision.
“We’re going to be looking at certain subsidies regarding electric cars and others and whether they should apply or not,” Mr. Kudlow added. “Can’t say anything final about that, but we are looking into it.”
The federal government offers a $7,500 tax credit to purchasers of battery-powered and plug-in hybrid vehicles, an incentive that many consumers have found attractive. The full credit, however, is only available on the first 200,000 electric vehicles an automaker sells. Once that threshold is reached, the credit falls to $3,750 for six months, then to $1,875 for an additional six months. Beyond that, there is no tax credit.
There are proposals in Congress that would extend or expand the credit, but the Trump administration’s opposition could dim or kill those prospects.
Tesla is the only carmaker to have sold more than 200,000 electric cars. At the end of this year, the tax credit on Tesla vehicles falls to $3,750.
G.M. says it has sold about 190,000 — mostly hybrid Volts, a model it said Monday it was discontinuing, and fully electric Bolts — and will pass 200,000 early next year.
The company said Monday that it would halt operations at four plants in the United States and one in Canada, at the cost of roughly 6,000 factory jobs, while also cutting its salaried work force in North America by 8,000.
As the White House pique became increasingly evident, the automaker put out a statement Tuesday on its “commitment to U.S. manufacturing” that said in part: “Many of the U.S. workers impacted by these actions will have the opportunity to shift to other G.M. plants where we will need more employees to support growth in trucks, crossovers and S.U.V.s.”
It added: “We appreciate the actions this administration has taken on behalf of industry to improve the overall competitiveness of U.S. manufacturing.”
The initial G.M. announcement sent its shares up by almost 5 percent on Monday, but they gave back about half of those gains on Tuesday in the face of the administration’s unhappiness.
