Donald Trump Threatens to Cut off General Motors' Subsidies After it announces Cuts to Thousands of Jobs
General Motors CEO Mary Barra (Photo: GM)

In what is a massive slap to US President Donald Trump’s claim of bringing back jobs to America’s rust belt, General Motors has announced massive job cuts as it will shut down five major car manufacturing plants across North America.

General Motors announced that up to 14,000 workers most of them in the U.S. will be laid off as part of its restructuring plan. GM said these actions are meant to prepare the company for a future of driverless and electric vehicles. GM is says it is  responding to a consumer shift away from sedans in favor of trucks and SUVs.

But this announcement has hit Trump hard as workers employed in blue collar jobs formed a major part of the US President’s voter base in 2016. President Donald Trump has hence threatened on Tuesday to cut all General Motors subsidies after this announcement by the American automaker.

"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."

Trump's tweet came a short time after US Economic Council Advisor Larry Kudlow said the White House's reaction was "a tremendous amount of disappointment maybe even spilling over into anger." Kudlow, who met with GM CEO Mary Barra on Monday, said that Trump felt betrayed by GM, which the government had been trying to help.

"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," Kudlow said. "We've done this to help you and I think his disappointment is, it seems like that they kind of turned his back on him."

But reports suggest that GM is refuting the charges by Trump. GM says it is unaware of any significant federal subsidies the company is receiving from the federal government beyond a $7,500 electric car tax credit, which goes to the consumer, not the company. However, this subsidy goes away once an auto maker reaches 2,00,000 electric cars sold. Trump also referred to the bailout package extended to American carmakers during the 2009 recession. “The U.S. saved General Motors, and this is the THANKS we get!" Trump tweeted on Tuesday.

In a statement, GM said it remains committed to "maintaining a strong manufacturing presence in the U.S." The company pointed to more than $22 billion of investments in domestic operations since 2009. GM said that "many" impacted workers will have the opportunity to shift to other GM plants.

"We appreciate the actions this administration has taken on behalf of industry to improve the overall competitiveness of U.S. manufacturing," GM said.