Kudlow: GM Layoffs 'Very Disappointing,' Shouldn't 'Affect the Overall Economy'
WASHINGTON -- National Economic Council Director Larry Kudlow said today that the administration is looking at possibly hitting at subsidies for General Motors after the automaker announced plant closings and layoffs, but that he ultimately didn't expect adverse effects on the economy from the move.
President Trump similarly tweeted that punitive measures should befall GM for its cost-cutting measures.
GM is among the automakers, though, that are about to hit the electric-car production level that would automatically phase out the tax credit. The level is 200,000 cars, and as of last month GM was at 196,986.
The assembly plants pegged for closure are Oshawa Assembly in Oshawa, Ontario, Canada, Detroit-Hamtramck Assembly in Detroit, and Lordstown Assembly in Warren, Ohio. Propulsion plants targeted are Baltimore Operations in White Marsh, Md., and Warren Transmission Operations in Warren, Mich. Layoffs in the U.S. would amount to 14,700 jobs.
“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” GM Chairman and CEO Mary Barra, who was a member of Trump's now-defunct economic advisory council, said in a statement. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
GM said the company would prioritize electric car development and concentrate on five models that account for three-quarters of the automaker's sales.
"Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all GM subsidies, including for electric cars," Trump tweeted. "General Motors made a big China bet years ago when they built plants there (and in Mexico) - don’t think that bet is going to pay off. I am here to protect America’s Workers!"
Kudlow told reporters at the White House press briefing that he met with Barra on Monday "and we had a lengthy conversation about the layoffs, the cause of the layoffs -- it's a great disappointment, obviously."
"The president indicated his own disappointment. He believes -- as, frankly, the prime minister of Canada, Trudeau, believes -- that the [United States-Mexico-Canada Agreement] deal was a great help to the automobile industry and to autoworkers. And, by the way, they made those statements separately," he said of the NAFTA replacement. "And yet, GM comes in right after the deal -- by the way, that deal will be signed in Argentina with the U.S. and Canadian representatives. So there's great disappointment there. There's disappointment that it seems like GM would rather build its electric cars in China rather than in the United States."
"We are going to be looking at certain subsidies regarding electric cars and others -- whether they should apply or not. I can't say anything final about that, but we're looking into it. Again, that reflects the president's own disappointment regarding these actions," Kudlow added.
He said that Barra told him "it may be possible to transfer workers to other plants in Texas and Michigan."
"I'm not an expert on General Motors. I'm not an analyst -- auto analyst. But that's what she said. But obviously there's lot of disappointment, even anger. I've heard it, again, from Mr. Trudeau, from President Trump, from Democrats and Republicans."
Kudlow said he didn't think the plant closings and layoffs would ultimately hurt the economy.
"I don't want anybody to get laid off. I want workers to do very well. I want worker wages to do well, and they are," he replied. "...Holiday season layoffs from GM -- brutal. Brutal. All right? Very disappointing. Will it affect the overall economy? I don't think so. I do not think so."