Trump says US is 'looking at cutting subsidies' for GM after plant closure announcement

Donald Trump has claimed his administration is “looking at cutting all” subsidies for General Motors after the car manufacturer announced plans to idle plants and cut thousands of jobs amid a decline in sales.

The president tweeted his remarks on Tuesday afternoon, writing, “Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland.”

“Nothing being closed in Mexico & China,” he 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. General Motors made a big China bet years ago when they built plants there (and in Mexico) - don’t think that bet is going to pay off.”

“I am here to protect America’s workers,” the president concluded.

The auto maker announced Monday it will cut up to 14,000 workers in North America and put five plants up for possible closure as it abandons many of its car models and restructures to focus more on autonomous and electric vehicles. The reductions could amount to as much as 8 per cent of GM’s global workforce of 180,000 employees.

The restructuring reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. In October, almost 65 per cent of new vehicles sold in the US were trucks or SUVs. That figure was about 50 per cent cars just five years ago.

The White House echoed the president’s remarks shortly after his tweets, expressing disappointment in GM’s decision to cut jobs and factories across the country.

“This is not about the president,” White House Press Secretary Sarah Huckabee Sanders said Tuesday. “This is about they’re making a car that people don’t want to buy.”

GM is shedding cars largely because it doesn’t make money on them, Citi analyst Itay Michaeli wrote in a note to investors.

“We estimate sedans operate at a significant loss, hence the need for classic restructuring,” he wrote.

Hours after the announcement, Mr Trump said his administration and lawmakers were exerting “a lot of pressure” on GM. He also said he told the company that the US has done a lot for GM and that if its cars aren't selling, the company needs to produce ones that will.

Mr Trump has made bringing back auto jobs a big part of his appeal to Ohio and other Great Lakes states that are crucial to his re-election.

At a rally near GM’s Lordstown, Ohio, plant last summer, the president told people not to sell their homes because the jobs are “all coming back.”

The layoffs come amid the backdrop of a trade war between the US, China and Europe that likely will lead to higher prices for imported vehicles and those exported from the US.

Ms Barra has said the company faces challenges from tariffs, but she did not directly link the layoffs to them.

The planned reduction includes about 8,000 white-collar employees, or 15 per cent of GM’s North American white-collar workforce. Some will reportedly take buyouts while others will be laid off.

At the factories, around 3,300 blue-collar workers could lose jobs in the US and another 2,600 in Canada, but some US workers could transfer to truck or SUV factories that are increasing production. The cuts mark GM’s first major downsizing since shedding thousands of jobs in the Great Recession.

The company also said it will stop operating two additional factories outside North America by the end of next year, in addition to a previously announced plant closure in Gunsan, South Korea.

Additional reporting by AP