Published: Sat, December 01, 2018
Money | By Wilma Wheeler

Trump says GM should repay USA taxpayers for bailout

Trump says GM should repay USA taxpayers for bailout

The Trump administration ordered a review of the retaliatory auto tariffs enacted by China and singled out General Motors suggesting they could have prevented the layoffs and plant closures by following the businesses practices of other vehicle companies.

The president, who has made trade wars a signature of his "America first" administration, was angered by GM's decision to cut thousands of jobs in a series of plant closures, including in OH and MI.

His tweets cited his disappointment with GM CEO Mary Barra and also referred to the 2008 government bailout of the USA vehicle industry.

He blasted GM's CEO, Mary Barra, "for closing plants in Ohio, Michigan and Maryland" even though "nothing" was "being closed in Mexico & China".

GM, now the second largest electric auto seller in the US, is on track to reach the 200,000 threshold by the end of this year, tech news site Clean Technica has reported, meaning that most of the electric cars that GM sells in 2019 and beyond won't qualify for the tax break anyway. The earlier rally was linked to Chief Executive Officer Mary Barra's plan to bolster cash flow by canceling production at five plants in the US and Canada and jettisoning slow-selling sedans from the lineup.

THE FACTS: Automakers have been steadily hiring since 2010 when Barack Obama was president.

But it was hard to miss the fact that the bulk of the US cuts came in the Midwest Rust Belt, a region that was instrumental in elevating Trump and his jobs-promising, "America First" agenda to the White House in 2016.

GM had to guess Trump might react the way he did. "A recent study by Trade Partnership estimated that roughly 150,000 net jobs would be lost in the USA if these tariffs are imposed".

But other automakers are also struggling. That fell to 8,200 in 2017 after Trump became president. For GM and other automakers, he pledged to lower fuel economy standards in return for jobs.

Despite the job growth in recent years, auto companies employ far fewer workers than they did in 2000.

GM said Monday that Lordstown will stop making the Chevy Cruze by March, at a cost of 1,400 union jobs on top of the 2,700 lost there since Trump took office. But General Motors had $6.1 billion in overseas cash in 2016, according to the Institute on Taxation and Economic Policy.

"We can confirm that we are considering building an engine plant in the U.S.to supply BMW vehicles manufactured in the USA and Mexico", Domonic Stoiber with BMW's Corporate and Governmental Affairs said in a statement.

In October, nearly 65 per cent of new vehicles sold in the United States were trucks or SUVs. It is expanding its existing United States assembly plant and is due to open another assembly plant in Mexico next year.

Separately, the Trump administration warned it may raise tariffs on Chinese vehicle imports. Over the years, the steel industry that once employed thousands of workers has disappeared. To him, his steel and aluminum tariffs have already proved their free-trade skeptics wrong: they have succeeded in propping up the domestic metal manufacturers they were meant to help. But it's clearly trended downward since 2000 when the sector had 621,800 jobs.

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