General Motors Shares Drop As Trump Threatens To Cease Subsidies
General Motors recent announcement to save costs at the expense of a significant number of products, facilities, and employees has President Donald Trump threatening to cease subsidies to the American corporation over Twitter. Unfortunately, the threat of presidential attention over the cost-saving move looks to be hurting the American manufacturer more than the actual projected losses.
Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including.... — Donald J. Trump (@realDonaldTrump) November 27, 2018
Trump's tweet was in response to General Motors deciding to shut down its manufacturing plants in Ohio, Michigan, Maryland in the US as well as the Oshawa Car Assembly Plant in Ontario, Canada. The company has also announced that it will slow down operations in a number of areas where plants will not be fully shut down.
Aside from the shut down of manufacturing plants, General Motors' will also be discontinuing a number of its vehicle models which include the Chevrolet Volt electric vehicle. The company's decision to shut down its plants and production is estimated to result in the loss of 14,000 jobs. CNBC notes that the reduction would affect at least 8,100 white collar positions and at least 6,000 factory jobs. The layoffs will also result in a 25 percent reduction of General Motors' executive employees.
GM workers have been part of the heart and soul of Oshawa for generations - and we'll do everything we can to help the families affected by this news get back on their feet. Yesterday, I spoke with @GM's Mary Barra to express my deep disappointment in the closure. — Justin Trudeau (@JustinTrudeau) November 26, 2018
President Donald Trump was not the only public figure vocal about General Motors' decision to cut costs at the expense of jobs. Canadian Prime Minister Justin Trudeau also criticized General Motors' plans and expressed support to the dispossessed employees. The Canadian Prime Minister met with General Motors executive Mary Barra to relay his concerns as he detailed on his Twitter post.
Former General Motors Vice Chairman Bob Lutz expressed his opinion over the cost-cutting measures being taken by the company. Lutz mentions that in the past, General Motors would only have reacted by raising sales incentives before resorting to factory closures. But Lutz sees the plant shutdowns as a "fast-acting and reality-oriented GM management" in action.
According to CNBC, General Motors shares were down by three percent as of Tuesday afternoon after the president tweeted about taking away government subsidies from the corporation. Despite the immediate response from the public, the publication points out that the specifics of how much the General Motors government subsidy is and how exactly the Trump administration can affect its implementation is unclear.
White House press secretary Sarah Huckabee mentions that President Donald Trump's plan to pull government subsidies from General Motors has yet to have a timeline. In addition, the press secretary can only emphasize that the president is still considering how the subsidy pullout will be implemented.