Yahoo Autos Trump Says General Motors Should Pay Back Bankruptcy Aid, Proposes More Tariffs
One day after General Motors said it will shutter five North American assembly and powertrain plants, President Trump rekindled his desire to slap a 25 percent tariff on all imported vehicles.
On Wednesday morning, Trump referenced the Johnson-era "chicken tax" that has blocked foreign-built pickups and vans from American soil for decades-and successfully forced foreign automakers to build theirs in North America-with 25 percent tariffs.
"If we did that with cars coming in, many more cars would be built here and GM would not be closing their plants in Ohio, Michigan and Maryland," he wrote on Twitter. "Get smart Congress."
GM is axing six car models by the end of 2019. In doing so, it is closing three assembly and two powertrain plants in Ohio, Michigan, Maryland, and Ontario that employ 5600 hourly workers. The company also announced plans to fire 15 percent of its salaried employees across the world, which could see thousands more jobless in the United States. GM in October said it was offering buyouts to 18,000 salaried employees in the U.S. in a bid to cut costs and raise cash reserves.
In May, Trump directed the Commerce Department to investigate whether all foreign cars pose a national security threat and postured about applying that same tariff rate to every imported vehicle. Weeks later, in June, he imposed a 25 percent tariff on $50 billion in Chinese goods, including China-built cars such as the Buick Envision. Since then, after outcry from the industry here and abroad, Trump has stayed quiet on the issue. Until now.
GM, in response, said it has invested more than $22 billion in the U.S. since its 2009 bankruptcy, claimed that “many” of the displaced 5600 factory workers will be reassigned within the company, and expressed thanks to the White House.
“We appreciate the actions this administration has taken on behalf of industry to improve the overall competitiveness of U.S. manufacturing,” GM said in the statement.
Trump also said GM should pay back the billions it cost taxpayers to rescue the company out of bankruptcy "if GM doesn't want to keep their jobs in the United States." On Tuesday, he said he might yank all electric-car subsidies, including the $7500 federal tax credit-which goes to consumers, not to General Motors-and said he is "very disappointed" with GM CEO Mary Barra (pictured above, in 2017, with Trump and United Auto Workers president Dennis Williams).
GM took $49.5 billion from the Troubled Asset Relief Program (TARP), created by President George W. Bush in 2008, as the U.S. Treasury assumed 61 percent control of GM under bankruptcy. The company killed off several divisions, including Pontiac and Hummer, shut down plants and dealerships, and fired thousands of employees while relisting on the New York Stock Exchange to a disappointing initial public offering that guaranteed the government would never recoup its full bailout. The U.S. eventually wrote off $11.2 billion after selling all of its company shares in December 2013.
GM was under no obligation to pay back the loss. Chrysler cost the U.S. $1.3 billion when the government sold its final shares in July 2011. However, the Treasury did claim $15 billion in net proceeds from the entire TARP, which included temporary government ownership of banks and former GM lenders such as Ally Financial.
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