Trump’s threats against GM fit a pattern: More bark than bite

The General Motors complex in Lordstown, Ohio, is among those that would close under the automaker's plan.
(Tony Dejak / Associated Press)

President Trump has been firing angry ultimatums at General Motors all week, threatening to cut subsidies to the automaker and recoup old bailout losses after GM announced it would close four U.S. plants and one in Canada to eliminate nearly 14,000 jobs.

As with other threats Trump has made as president, these may be little more than bark.

Administration officials could point to no specific actions the administration is considering, much less taking, even as they scrupulously avoided making any public comments that would contradict the president.

Trump may yet find a way to penalize the automaker. As he often says, maybe he will and maybe he won’t. In that sense, the GM threats fit a pattern that has forced financial markets, foreign governments and other close watchers with much at stake to adjust to an erratic president whose word means far less than his predecessors’.


“It really depends on the issue,” said Corey Lewandowski, a former Trump campaign manager who remains close to the president. “Some issues, a veiled threat is enough to back people off. And other issues, a threat is a clear sign of the action he’s going to take.”

Trump’s most specific threat involves killing a tax credit of up to $7,500 for buyers of electric cars. Not only would that be a blunt instrument, hurting other automakers that produce electric cars, but also the incentive is in the tax code, and alternative energy proponents have beaten back prior attempts by some Republicans in Congress to kill it.

Also, the tax break begins to wind down after an automaker has sold 200,000 cars, a mark GM said it will hit by the end of this year. After that, the credit will be steadily reduced for buyers of Chevrolet’s Volt and Bolt before expiring entirely by the end of next year.

GM, along with Nissan and Tesla, is lobbying Congress to lift the cap for all automakers above 200,000, and Trump’s threats may hurt its chances. Administration officials would not comment on whether the White House planned to weigh in.

Trump also tweeted this week that GM “should pay back the $11.2 billion bailout that was funded by the American taxpayer.”

That is also unlikely, if not impossible. The federal government invested nearly $50 billion to rescue the automaker during the financial crisis. Much of that was converted to stock in the company, which the government sold at a loss between 2010 and 2013, largely to allay concerns among lawmakers about a long-term connection between a major corporation and the government.

The auto bailouts of 2008-2009 largely worked in staving off massive job losses at GM, Chrysler and their long chain of suppliers — and the costs in unemployment assistance and lost tax revenues that the companies’ failure would have caused. As a former shareholder, the government has little recourse in recouping its losses, which the government estimates at $11.2 billion.

Trump is hardly the only politician angry with GM. Rep. Debbie Dingell, a Michigan Democrat and former executive in the company, has been fuming at the layoffs and their timing, just before the holidays.


“I’m pretty mad at GM,” she told NPR on Wednesday. “I mean, you have to be profitable. I understand that. But you also have to take care of your workers. The workers matter as much as the executives do. And it used to be that those at the top cared about having some kind of balance. And I just quite frankly didn’t see a lot of concern for workers.”

Trump has channeled working-class anger in Michigan and other manufacturing states since his campaign, lamenting the loss of industrial jobs. He has cut corporate taxes substantially and imposed tariffs on steel and aluminum. The effects of those policies on the economy have been widely debated.

In many cases, his threats do not produce policy proposals, or any results at all.

He tweeted repeatedly over the summer against Harley Davidson after it announced it would move production of European motorcycles overseas.


“If they move, watch, it will be the beginning of the end — they surrendered, they quit!” Trump tweeted in June. “The Aura will be gone and they will be taxed like never before!”

Trump later tweeted support of a boycott. But he neither sustained that effort nor outlined any plans or attempts to tax the company.

In September, he threatened to take action against Google unless it changed its algorithms to display more positive news about him and his administration. Again, no action followed. Trump made a splashy promise last year that the Keystone XL pipeline would be required to be built with American steel. But his administration conceded weeks later that his “buy American” requirement could not apply to that project.

After Trump attacked Amazon for having a favorable relationship with the U.S. Postal Service, his administration formed a special commission to reform the Postal Service. The commission, created in April, has yet to release its report.


Administration officials and former business associates have said they are often unsure when Trump speaks whether he intends action or is simply venting. At times, warring factions use that ambiguity to push their own agenda inside the administration, either urging Trump to act or burying his directives and hoping he forgets.

The stock market has also taken notice of Trump’s lack of follow-through, discarding some of his tweeted threats while reacting strongly to others.

“You’ve got to chase these things down,” said David Tamasi, a lobbyist who is close to the administration. “To the specific constituencies that care about this stuff, you’ve got to dig deep.”

Tamasi said Trump was similar to other politicians in using rhetoric to advance his political agenda. The difference is that other politicians generally have a process to vet everything they say with internal policy experts, who produce talking points and explanations for the policy implications. Trump, by contrast, just puts it all out on Twitter, without preparation, context or nuance.


“We’ve all had to adjust to deciphering and discerning,” Tamasi said.

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Twitter: @noahbierman