• 9 hours $120,000 Banana Gets Eaten At Art Basel
  • 1 day The Fastest Growing Energy Sectors Of 2019
  • 2 days How To Spy On Yourself: The Doorbell To End Civil Liberties
  • 3 days Analyst Predicts Tesla Stock Will Soar To $500
  • 4 days Australian Billionaire To Invest In $88 Million Struggling Solar Project
  • 5 days Twitter-Shaming: The Biggest Threat To Any Business
  • 5 days Canada Looks To Become A Major Source For Critical Minerals
  • 5 days Hedge Funds Are Piling Into This Key Commodity
  • 7 days Trade Deal Not Likely Before Christmas 2020
  • 7 days America's $16 Trillion Debt Bubble Is About To Burst
  • 8 days Black Friday Breaks Online Shopping Records
  • 8 days Tesla's Biggest Competitor Is Hiding In Plain Sight
  • 9 days Are Celebrities Good Or Bad For Cannabis Stocks?
  • 10 days Venezuela’s Crisis Continues As Maduro Spends $5 Billion On Oil Deals
  • 11 days Elon Musk Claims 250,000 Orders For Cybertruck
  • 12 days How To Survive Thanksgiving Politics With Cannabis Gravy
  • 13 days The Fragility Of Monetary Policy
  • 14 days 5 Oligopoly Stock Picks For Your 2020 Portfolio
  • 14 days $7 Trillion In Unfunded U.S. Pensions As Domestic Debt Hits A Record High
  • 15 days Retail Is Alive And Well, But Only For The Rich
How To Spy On Yourself: The Doorbell To End Civil Liberties

How To Spy On Yourself: The Doorbell To End Civil Liberties

The billion-dollar ‘smart’ doorbell company…

$120,000 Banana Gets Eaten At Art Basel

$120,000 Banana Gets Eaten At Art Basel

The banana escapade attracted a…

The Fastest Growing Energy Sectors Of 2019

The Fastest Growing Energy Sectors Of 2019

The world saw a significant…

  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