• 2 hours Tesla, Apple Claim China Is Stealing Intellectual Property
  • 4 hours EV Giants Duke It Out For Battery Dominance
  • 21 hours Tech Billionaire Takes Aim At Google
  • 23 hours Chinese Police Bust Largest Ever Illicit Crypto Mining Operation
  • 1 day Expect A Pullback Before Gold's Next Major Rally
  • 1 day Why Interest On Gold Matters
  • 2 days Ten Extravagant Food Items For The Wealthy Only
  • 2 days Why Saudi Arabia Won't Give Up On The Aramco IPO
  • 3 days $32 Million Crypto Heist Halts Tokyo Exchange
  • 3 days Is A Gold Selloff Looming?
  • 4 days Central Banks Are Stashing Gold And Dumping Treasuries
  • 4 days Three Cannabis Trends Flying Under Investors’ Radars
  • 5 days $1.3 Billion In Cocaine Found On JPMorgan Vessel
  • 5 days Amazon Teams Up With Lady Gaga To Win Over Generation Z
  • 5 days Dollar Falls As Powell Teases Rate Cuts
  • 5 days Will The World's First Trillion Dollar Company Ever Bounce Back?
  • 6 days Many Americans Will Never Stop Working
  • 6 days Mozilla vs DarkMatter: The Cyber Espionage End Game
  • 6 days Chile Cracks Down On Environmental Infractions
  • 6 days Warning Signs Emerge For Boeing
Many Americans Will Never Stop Working

Many Americans Will Never Stop Working

The word “retirement” used to…

Fred Dunkley

Fred Dunkley

Writer, Safehaven.com

Fred Dunkley is a tech analyst, writer, and seasoned investor. Fred has years of experience covering global markets and geopolitics. 

Contact Author

  1. Home
  2. News
  3. Breaking News

Trump Takes Aim At General Motors

Trump

A trade war that has sent steel prices soaring, a slowdown in new car sales and a miscalculated bet on smaller vehicles have pushed General Motors to the frontline of America’s trade war, forcing a decision to cut 15 percent of its salaried workforce and close five North American factories.

Following other threats against GM, Trump on Tuesday threatened to destroy GM’s electric vehicle business, too, tweeting this:

(Click to enlarge)

Trump’s tirade follows an announcement by GM Monday that it would cut 14,000 jobs and close down five facilities, contradicting Trump’s promise that his trade war and other measures would bring jobs back to the American auto industry.

And the tweet threatening to remove GM’s EV subsidies (though, we note, these are federal, nation-wide subsidies that are not specific to GM), is in response to the auto giant’s statement to the effect that its layoffs and plant shutdowns are part of its strategy to prepare for the driverless, EV future.

This is where the market is headed, with or without the president’s approval. From this perspective, GM will likely be wondering if we exist in a free market anymore, or if we are going the way of China.

GM’s decision was also about the growing demand for SUVs rather than smaller vehicles. In October, almost 65 percent of new vehicles sold in the U.S. were trucks or SUVs, up from 50 percent five years ago, according to the Associated Press. Related: What Warren Buffett Does With His Billions

Unfortunately for GM, Trump’s tweet have shaken its stock, which closed down 2.6 percent Tuesday after having made gains on its new strategy on Monday.

(Click to enlarge)

After a strong second quarter, in July, GM had to cut its outlook over steel and aluminum tariffs, which led to “significant increases in commodity costs” coupled with unfavorable currency exchange rates. The auto giant cut is 2018 per-share profit outlook from $6 to $5.14.

That was a month after GM warned that tariffs could “lead to less investment, fewer jobs, and lower wages for our employees,” and risked “undermining GM’s competitiveness against foreign auto producers.”

The backlash continued on Wednesday, when Trump retweeted an earlier rant suggesting that GM should pay back earlier government bailout money if it can’t keep jobs in the U.S., Reuters reported.

“If GM doesn’t want to keep their jobs in the United States, they should pay back the $11.2 billion bailout that was funded by the American taxpayer,” read the tweet, which was originally floated by The Trump Train, and then retweeted by Trump himself.

At the end of the day, Trump feels betrayed by GM, so this will get personal.

Related: Tesla’s Chinese Sales Are Plummeting

"Look, we made this deal, we've worked with you along the way, we've done other things with mileage standards, for example, and other related regulations," National Economic Council Director Larry Kudlow said, speaking of the new U.S.-Mexico-Canada trade agreement. "We've done this to help you and I think his disappointment is it seems like they kind of turned their back on him."

But some view GM’s announcement of plant closures as a negotiating tactic—not unlike Trump’s--ahead of contract talks with the United Auto Workers union next year, AP reported.

Whatever GM’s situation, Trump says it’s “playing around with the wrong person” and it “better damn well” open a new Ohio plant. And if it doesn’t, it will lose EV subsidies.

From Bloomberg’s view, though, there is no way Congress is going to cancel EV tax credits or take any major action against GM—not in the current lame-duck session, and definitely now with Democrats in the House.

By Fred Dunkley for Safehaven.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment