Expert breaks down Washington's threats to GM

(FOX 2) - "This country has done a lot for General Motors, you better get back in there soon," President Donald Trump said.

It's been a tough week for General Motors and its workers are facing a changing future.
  
GM says they will no longer be asking five North American plants to make cars anymore - for cars that won't be made in the United States anymore.  

Instead, they say they will double the resources given to electric and autonomous vehicle technology. President Donald Trump is threatening to pull electric vehicle tax credits that GM currently benefits from.  

"If they are trying to harm General Motors they can take it away," said Dustin Walsh, Crain's Detroit reporter. "And it could have a long-term effect on the EV's and the people buying EVs, short term. It's going to go away anyways so it's kind of a hollow threat made by the president thus far." 

Walsh is writing about the threat of presidential proportions.  Why this may be a hollow threat?  It's all in the numbers and the timing. 

Once GM sells 200,000 electric vehicles the tax credit gets cut in half.  After 18 months, it's completely phased out.  

Look at electric vehicles, not in terms of sales which have been sagging. Instead think of electric vehicles as a gateway to an autonomous future which GM is banking on. 

"So everyone is investing in autonomous vehicles and the fact is, whether it's car sharing, that is the future automotive companies see," Walsh said. "That is the future GM certainly sees. The only way to get there is to create electric vehicles. That's really what they're doing." 

The president alone can't take away EV credits.  Congress could pass legislation to do it, or they could threaten to stop an extension of the tax breaks. 

"If they were eliminated would there be any impact, I think there would be," Walsh said. "But I don't think it's going to change the direction of the ship. The ship is going that way regardless of whether there are incentives or not."
 
And finally, the potential closing of five plants.  There is a reason GM didn't use the words idle or close, Walsh said.  

"If you look at what General Motors is really trying to do, they are saying we are going to close down five plants," Walsh said. "The reality is, it's a negotiating tool for the UAW that will result in a better deal for General Motors. It may be fewer workers and then they will re-open a few plants or maybe they will make electric vehicles."