GM shares fell after Trump threatened to cut all subsidies


"Very disappointed with General Motors and their CEO, Mary Barra, for closing factories in Ohio, Michigan and Maryland," Trump tweeted. "We are now considering cutting all @GM subsidies, including for electric cars."

GM (GM) shares fell as much as 3.8% in comments. GM closed 2.6% lower, erasing some of Monday's gains.

It is unclear what the subsidy meant by Trump meant.

Someone familiar with the matter told CNN Business that GM was not aware of any significant federal subsidies that companies received exceeding the $ 7,500 plug-in tax credit, which goes to consumers, not companies.

The federal government provides tax credits for each vehicle plug-in purchased. However, these subsidies disappeared as car makers reached 200,000 electric cars sold. And GM can reach that threshold by the end of the year, making tax credits 2019 and 2020 smaller.

"All industries qualify for this. Nothing is exclusive to GM," said Jeremy Acevedo, manager of industrial analysis at Edmunds.

Tesla (TSLA), the leading electric car maker, has reached 200,000 milestones earlier this year. The tax credit will start getting smaller on January 1.

In a statement, GM said it remained committed to "maintaining a strong manufacturing presence in the US" The company appointed more than $ 22 billion of investment in domestic operations since 2009. GM noted that the restructuring announced on Monday aimed to support future growth and success long-term. And GM said that "many" affected workers would have the opportunity to switch to other GM factories.

"We appreciate the actions taken by this government on behalf of the industry to improve the competitiveness of US manufacturing as a whole," GM said.

Cutting GM jobs: This is what changes a century-old company
Between 2009 and 2014, the Department of Energy provided loans and grants for the development of electric vehicles and energy saving technologies. Tesla, Nissan and Ford participated, but GM did not, according to the Department of Energy.

GM also does business with the federal government, including by selling cars and trucks used by various institutions. Chevy Suburbans is a staple for the Secret Service that protects Trump and other federal officials. GM also produces "The Beast," a Cadillac made to transport the president.

Preparing for the future

GM's termination hurts Trump's campaign promises to restore American automotive work. But Barra doesn't pay attention to the next election. He took steps to prepare GM for the future of transportation: cars without drivers, electric vehicles and sharing rides.

"This is for the long-term survival of the company," Acevedo said. "They duplicate what they consider to be the future so they are not left behind."

While GM did not mention rates for factory closures, Trump's trade crackdown has created problems for the automotive industry. GM said higher commodity prices and * currency headwinds * would hurt the company by $ 1 billion. The cost of GM's main commodities is steel and aluminum, both of which have risen in price in response to Trump's tariffs.

The battle with Trump puts Barra in a difficult place. Last year, Barra and other business leaders agreed to serve on the CEO board which was formed to advise Trump. However, Trump's advisory panel collapsed in August 2017 following a strong reaction to the president's comments on violence at a white nationalist rally in Charlottesville, Virginia.

CNN Business & # 39; Peter Valdes-Dapena contributed to this report.


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