WASHINGTON — President Donald Trump tested the limits of his presidential authority and political muscle as he threatened to cut off all federal subsidies to General Motors because of its planned massive cutbacks in the U.S.
Trump unloaded on Twitter on Tuesday, a day after GM announced it would shutter five plants and slash 14,000 jobs in North America. Many of the job cuts would affect the Midwest, the politically crucial region where the president promised a manufacturing rebirth. It was the latest example of the president’s willingness to attempt to meddle in the affairs of private companies and to threaten the use of government power to try to force their business decisions.
“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China,” Trump tweeted. “The U.S. saved General Motors, and this is the THANKS we get!”
He added that his administration was “looking at cutting all GM subsidies, including for electric cars.”
Trump’s tweets came shortly after National Economic Council Director Larry Kudlow said the White House’s reaction to the automaker’s announcement was “a tremendous amount of disappointment, maybe even spilling over into anger.” Kudlow, who met with Barra on Monday, said Trump felt betrayed by GM.
“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, referencing the recently negotiated U.S.-Mexico-Canada trade agreement. “We’ve done this to help you and I think his disappointment is it seems like they kind of turned their back on him.”
The White House rebuke appears to fly in the face of long-held Republican opposition to picking winners and losers in the marketplace. A day earlier, Trump issued a vague threat to GM to preserve a key plant in the presidential bellwether state of Ohio, where the company has marked its Lordstown plant for closure.
“That’s Ohio, and you better get back in there soon,” he said.
It’s not clear precisely what action against GM might be taken, or when, and there are questions about whether the president has the authority to act without congressional approval.
Buyers of electric vehicles made by GM and other automakers get federal tax credits of up to $7,500, helping reduce the price as an incentive to get more of the zero-emissions vehicles on the road. But GM is on the cusp of reaching its subsidy limit.
White House press secretary Sarah Huckabee Sanders said she did not have any additional information on the president’s threat.
Trump has long promised to return manufacturing jobs to the United States and particularly the Midwest. At a rally near GM’s Lordstown plant last summer, Trump told people not to sell their homes because the jobs are “all coming back.”
In a statement Tuesday afternoon, GM tried to appease the Trump administration while justifying the decisions it announced Monday. “We appreciate the actions this administration has taken on behalf of industry to improve the overall competitiveness of U.S. manufacturing,” the statement said.
Many of the workers who will lose jobs if the plants close could transfer to another GM factory where production is being increased, spokesman Patrick Morrissey said. For instance, GM plans to add hundreds of workers at its pickup truck assembly plant in Flint, Michigan, Morrissey said. Workers also will be added at an SUV factory in Arlington, Texas.
But those expansions aren’t enough to accommodate all the roughly 3,300 U.S. factory workers who could lose their jobs.
GM said it has invested more than $22 billion in U.S. operations since 2009, when it exited bankruptcy protection.
Trump has made direct negotiation with business leaders a centerpiece of his administration, including talks with defence contractor CEOs on bringing down prices on new systems, including the upcoming replacement to the aircraft that serves as Air Force One. He has never been shy about voicing his frustration with their decisions.
But Trump’s deal-making image is far from flawless. Three weeks after his election, Trump travelled to Indianapolis to announce a tax-incentive agreement partially reversing the closure of a Carrier factory, which was set to close, cutting about 1,400 production jobs.
Trump frequently criticized the closure plans during the 2016 campaign and promised to prevent similar occurrences. Under the tax-incentive deal, Carrier pledged to keep nearly 1,100 jobs in Indianapolis, including some 800 furnace production jobs it planned to cut with outsourcing. But about 550 jobs were still eliminated at the plant.
GM’s attempt to close the factories still must be negotiated with the United Auto Workers union, which has promised to fight them legally and in collective bargaining.
The factory announcements likely represented GM’s opening bid in contract talks with the union that start next year, said Kristen Dziczek, vice-president of labour and industry with the Center for Automotive Research, an industry think-tank in Ann Arbor, Michigan. The factories slated for closure could get new products in exchange for items the company wants from the union, she said.
Keeping open a plant slated for closure is not without precedent for GM. In 2009, GM announced that it intended to close a huge assembly plant in Orion Township, Michigan, north of Detroit. But it later negotiated concessions from the union and reopened the plant to build the Chevrolet Sonic subcompact car. The factory is still in operation and now builds the Sonic and the Bolt electric car.
The reductions could amount to as much as 8 per cent of GM’s global workforce of 180,000 employees.
The restructuring reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. In October, almost 65 per cent of new vehicles sold in the U.S. were trucks or SUVs. That figure was about 50 per cent cars just five years ago.
Jerry Dias, president of the Canadian trade union UNIFOR, said Tuesday that GM’s CEO had insulted the president of the United States and the prime minister of Canada.
“If you are going to have a company that’s going to show us their middle finger, then I think our government should show them our middle finger as well,” Dias said.
Lemire reported from New York. Associated Press writers Tom Krisher in Detroit, Rob Gillies in Toronto and Jill Colvin in Washington contributed reporting.
Follow Lemire on Twitter at http://twitter.com/@JonLemire and Miller at http://twitter.com/@zekejmiller
Jonathan Lemire And Zeke Miller, The Associated Press
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Insurance rate increases absolutely unacceptable: NDP Critic for Service Alberta
This post was submitted by Jon Carson, NDP MLA for Edmonton-West Henday, Opposition Critic for Service Alberta
Thirty per cent.
That’s how much auto insurance rates skyrocketed by for some Albertans at the end of this year, after Premier Jason Kenney and the UCP removed the five per cent cap on rate increases that our NDP government brought in, taking a “no limit” approach to how much insurance companies could actually raise rates.
The jump was immediate.
Albertans saw a wave of premium increases bordering on price gouging. Over 90% of car insurance companies filed for rate increases as soon as the cap was lifted, and rushed to bill drivers as soon as they could. Of the companies that received approved rate changes, the increases ranged from 4.9 per cent to an eye-popping 29.8 per cent.
It was a nice gift from Jason Kenney, who already slammed families for hundreds of dollars of new costs in his fall budget, including hikes to income tax, property tax, as well as more in school fees, prescription drugs and college tuition.
As usual, Finance Minister Travis Toews trotted out the UCP’s one-trick pony and blamed the NDP, claiming that insurance companies were set to pack their bags and flee the province if he didn’t let them jack up premiums beyond five per cent.
The lobbying effort came out in full force. The brokers, the insurance companies, and the Insurance Bureau of Canada are working overtime to sell quite the sob story: a massive spike in claims costs, not enough options for drivers, etc, etc. It’s tough times for the poor, little ol’ car insurance company.
What a load. These are some of the biggest and most profitable companies in Canada, and they simply want back the power they had to jack up premiums hand over fist.
The truth is that claims costs over the past few years are level, a fact that’s supported by the Insurance Bureau of Canada‘s own data. In fact, an actuarial analysis by Fair Alberta Injury Regulators, an organization made up of concerned Albertans, doctors and legal experts, found that injury payouts have stabilized in the last few years, and even started to dip in 2019. Their actuary specifically found evidence that claims are “not skyrocketing.”
This is further supported by the Alberta Superintendent of Insurance, responsible for all regulatory oversight of insurers operating in Alberta with a specific duty to ensure that insurance companies treat Albertans fairly. In his annual report for 2018, he found on average that the claims ratio for car insurance was 80 per cent across all companies in Alberta. Not the 120 per cent figure the insurance companies trot out on TV.
And while the UCP Government continues to claim they have documents to prove the cap made the car insurance industry unsustainable, they haven’t provided a single piece of paper showing any of these companies would bail if they could–GASP–only raise premiums five per cent every year.
So why remove the cap? Well, in politics, it’s who you know. And Jason Kenney knows an awful lot of people in the insurance industry. Namely, his former chief of staff and campaign director Nick Koolsbergen, who was hired to lobby the Premier on behalf of the car insurance industry just last year. He has Kenney’s cell phone number.
Sounds like a good guy to have on your side… if you’re a car insurance company.
The fact is, these companies turn a profit of tens of millions of dollars each year. They’re used to having carte blanche in Alberta, and they want it back.
Under the thinly-veiled guise of “red tape reduction”, the UCP has struck a panel looking at more regulatory changes that the insurance lobby itself has said “could also change the rate regulation framework that governs how insurers set premiums.”
If costs are going to go up even more, who will Jason Kenney look out for? His friends and interests in big insurance? Or everyday Albertans driving to work?
Knowing Jason Kenney, Albertans should brace for impact.
Jon Carson is the MLA for Edmonton-West Henday and the Alberta NDP Opposition Critic for Service Alberta.
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