Trump wants to take away General Motor’s subsidies, according to CNN/Business. But there’s a problem:
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 as much as 3.8% on the comments. GM closed 2.6% lower, wiping out a chunk of Monday’s gains.
Trump’s threat came a day after GM announced plans to cut 14,000 jobs and shut five facilities in North America, 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.
It’s not clear what subsidies Trump was referring to.
A person familiar with the matter told CNN Business that GM is unaware of any significant federal subsidies the company is receiving beyond a $7,500 plug-in tax credit, which goes to the consumer, not the company.
It doesn’t matter which mythical subsidy he’s whining about, because it’s not about the subsidies. It’s about sustaining the tough guy myth that Donny-boy always punches back twice as hard. He made promises to his base that he’d bring back all those automotive jobs that went away, and now he’s going to look bad because GM is closing those plants.
So he has to look like he’s doing something to ward it off, and, whether or not he actually talked to GM, he has to make it look like he’s working ever-so-hard to back the little guy.
But, as GM notes, this is partially about the Trump tariffs, and partially about an environment that is perceived to be in the midst of rapid change. Now, I may have my doubts concerning whether or not anyone is going to come up with a reasonable driverless vehicle, but that’s neither here nor there. GM, who has far more resources than I do, thinks it’s coming, and that those manufacturing plants will become superfluous. Given those facts and today’s private sector ethical system, the shuttering of those plants is almost unavoidable.
In reality, Trump would do the exact same thing as GM is doing if he was the CEO. But he can’t be seen to be that cold to the workers who are being tragically hit by the winds of change, so he’s out there making loud noises in the confident hope that his “failure,” which is only partially self-inflicted, will not hurt him with his base.
Ironically, Trump is interfering in the free market, which is certainly a violation of one of the tenets of the Republican Party. Would Obama do the same thing? I doubt it. I’d expect to hear such words as retraining in any speech he gave on the subect, because his advisors would tell him that the plant closings were irreversible, and Obama always seemed to be oriented on the future, not the past. And to listening to expert advice.
While Trump remains the ever-incompetent and overconfident amateur.
