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Wednesday, November 28, 2018

GM Decision Won't Sit Well

NORMALLY, YOU WILL NOT SEE ME ADVOCATING FOR A PRESIDENT—OR THE GOVERNMENT FOR THAT MATTER—INTERFERING WITH BUSINESS DECISIONS, although I also freely admit that there are many circumstances when it makes sense for government to offer tax breaks and other incentives to businesses as it has a payoff through commerce and jobs, and of course all of that also produces tax revenues.

But the decision by General Motors to shutter plants and lay off roughly 14,000 workers, and President Trump's threat to cut some of the subsidies offered to GM makes me think a little bit of interference is in order.

For one thing folks, we bailed GM out roughly ten years ago to the tune of billions of dollars worth of taxpayer money.

NOT ONLY THAT, BUT THE DECISION GM IS MAKING IS NOT BECAUSE IT IS LOSING MONEY, AND NOT BECAUSE IT IS NOT PROFITABLE.

GM is indeed turning a profit. So why the shutterings and layoffs?

They are saying it's to restructure to focus more on hybrids and electric cars. But the reality is that the plants they are planning to shutter are where they make cars, not the more popular SUV's and crossover vehicles.

What Trump is essentially saying to GM is that there is no reason to lose jobs in America if the plants can be retooled and if we can potentially make the more popular vehicles people want right here on our own soil.

Granted, GM does not have to answer to the government and certainly it does not have to answer to the president. And Trump cannot remove any subsidies without support from Congress. But GM does have to answer to the consumer. In particular the American consumer. And I am not sure the American consumer is going to be onboard with GM's decision based on the fact that we bailed them out and the fact that they are profitable and still closing plants.


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