President Donald Trump threatened on Tuesday to cut all General Motors subsidies after the automaker announced thousands of jobs cuts.
"Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland," Trump tweeted. "We are now looking at cutting all @GM subsidies, including for electric cars."
GM (GM) stock declined more than 3% and fell to session lows on the comments.
Trump's threat came a day after GM announced plans to cut 14,000 jobs and shut five facilities in North America including the plant in Lordstown, Ohio, dealing a blow to the president's promise to help auto workers. GM said the moves are designed to prepare the company for a future of driverless and electric vehicles. GM is also responding to a consumer shift away from sedans in favor of trucks and SUVs.
White House economic adviser Larry Kudlow said at Tuesday's White House press briefing that he met with Barra on Monday to talk about the layoffs. "It's a great disappointment, obviously," he said.
Kudlow said the Trump administration will be looking into subsidies for "electric cars and others." He did not specify how much GM receives in federal subsidies.
"The U.S. saved General Motors, and this is the THANKS we get! Trump tweeted.
GM did not respond to a request for comment.
The biggest federal subsidy for electric cars made by GM is about to go away on its own. And speeding its demise would hurt American car buyers.
The federal government provides a $7,500 federal tax credit for each plug-in vehicle purchased. However, this subsidy goes away once an auto maker reaches 200,000 electric cars sold. And GM may hit that threshold by the end of the year, making its 2019 and 2020 tax credits smaller.
"The entire industry qualifies for this. It's nothing exclusive to GM," said Jeremy Acevedo, manager of industry analysis at Edmunds.
Between 2009 and 2014, the Energy Department also provided loans and grants toward the development of electric vehicles and energy saving technology. Tesla, Nissan and Ford participated, but GM did not, according to the Energy Department.
Preparing for the future
The GM job cuts hurt Trump's campaign promise to bring back American auto jobs. But Barra isn't paying attention to the next election. She's taking steps to prepare GM for the future of transportation: driverless cars, electric vehicles and ride sharing.
"It's for the long-term viability of the company," said Acevedo. "They are doubling down on what they perceive as the future so that they don't get left behind."
While GM did not cite tariffs for the plant closure, Trump's trade crackdown has created problems for the auto industry. GM has said higher commodity prices will cost the company $1 billion this year. GM's major commodity costs are steel and aluminum, both of which have climbed in price in response to Trump's tariffs.
The battle with Trump puts Barra in a difficult spot. Last year, Barra and other business leaders agreed to serve on a CEO council formed to advise Trump. However, Trump's advisory panels collapsed in August 2017 following a backlash over the president's comments on the violence at a white nationalist rally in Charlottesville, Virginia.