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Is Trump going to bury the auto industry in a shallow grave?
To put it mildly, Donald Trump was not pleased to learn that General Motors would lay off 15 percent of its salaried workforce and close five North American factories—including one 17 miles from where he declared in July 2017 that “jobs are coming back, they’re all coming back.” “They better damn well open a new plant there very quickly,” he fumed to The Wall Street Journal. “I told [G.M.], ‘You’re playing around with the wrong person.’” Strangely, though, at no time during his rant—in which he made several vague threats about what might happen if the company didn’t immediately open a new facility in the town where it literally just announced it would be closing the existing one—did the president mention the effect his steel and aluminum tariffs have had on the auto industry, like the fact that they’ve so far cost carmakers billions, including some $700 million at G.M. alone.
Some of the industry’s problems, of course, have nothing to do with Trump. For instance, American automakers are finding it nearly impossible to compete with Japan when it comes to sedans, and there’s been a significant migration to electric cars, where China holds a major advantage. But the president’s “good” and “easy-to-win” trade wars have made the situation markedly worse—and not just due to the higher prices of steel and aluminum. In September, a headline wondered aloud, “Did Trump just kill the U.S. auto industry?” after Germany’s top manufacturers—BMW, Daimler, BASF, Volkswagen, Siemens—all announced tens of billions of new investments in China, with BMW saying it would move a portion of its S.U.V. production out of its giant South Carolina plant in response to Trump’s auto tariffs. In June, G.M. warned that the policy could lead to a “reduced presence” in the U.S., as well as fewer U.S.-based jobs.
Another thing Trump conveniently glided over during his chat with the Journal? The fact that more job losses are practically a certainty. In a detailed blow-by-blow, Axios confirmed on Tuesday what most people outside the White House have known for some time now: big automakers are in very, very bad shape, despite the claims by the 45th president that they, like the coal industry, are coming back in a major way. In April, Ford announced that it was dropping all but two cars from its North American dealerships. In a recent interview, Tesla C.E.O. Elon Musk said that earlier this year his entire company was “within single-digit weeks” of driving off a cliff without new financing or layoffs. Fiat Chrysler cut its 2018 outlook. G.M. might have framed Monday’s announcement as “transforming its global workforce to ensure it has the right skill sets for today and the future, while driving efficiencies through the utilization of best-in-class tools,” but the writing is more or less on the wall.
Meanwhile, instead of backing down on policies that are having a quite obvious negative impact on American manufacturers, President Slow-on-the-Uptake is preparing to double down on tariffs, likely boosting the levies on $200 billion of Chinese goods to 25 percent, and threatening to slap tariffs on the entirety of Chinese imports if he doesn’t get what he wants from Beijing. Why? Because he still thinks tariffs are the best, twice telling the Journal that he is a “tariff person,” and citing his decision to use them as evidence of his intelligence. (“I happen to be a tariff person because I’m a smart person.”) And don’t even think about blaming tariffs for G.M.’s plight. Tariffs, much like the president’s favorite child, are perfect and unimpeachable:
Some of the industry’s problems, of course, have nothing to do with Trump. For instance, American automakers are finding it nearly impossible to compete with Japan when it comes to sedans, and there’s been a significant migration to electric cars, where China holds a major advantage. But the president’s “good” and “easy-to-win” trade wars have made the situation markedly worse—and not just due to the higher prices of steel and aluminum. In September, a headline wondered aloud, “Did Trump just kill the U.S. auto industry?” after Germany’s top manufacturers—BMW, Daimler, BASF, Volkswagen, Siemens—all announced tens of billions of new investments in China, with BMW saying it would move a portion of its S.U.V. production out of its giant South Carolina plant in response to Trump’s auto tariffs. In June, G.M. warned that the policy could lead to a “reduced presence” in the U.S., as well as fewer U.S.-based jobs.
Another thing Trump conveniently glided over during his chat with the Journal? The fact that more job losses are practically a certainty. In a detailed blow-by-blow, Axios confirmed on Tuesday what most people outside the White House have known for some time now: big automakers are in very, very bad shape, despite the claims by the 45th president that they, like the coal industry, are coming back in a major way. In April, Ford announced that it was dropping all but two cars from its North American dealerships. In a recent interview, Tesla C.E.O. Elon Musk said that earlier this year his entire company was “within single-digit weeks” of driving off a cliff without new financing or layoffs. Fiat Chrysler cut its 2018 outlook. G.M. might have framed Monday’s announcement as “transforming its global workforce to ensure it has the right skill sets for today and the future, while driving efficiencies through the utilization of best-in-class tools,” but the writing is more or less on the wall.
Meanwhile, instead of backing down on policies that are having a quite obvious negative impact on American manufacturers, President Slow-on-the-Uptake is preparing to double down on tariffs, likely boosting the levies on $200 billion of Chinese goods to 25 percent, and threatening to slap tariffs on the entirety of Chinese imports if he doesn’t get what he wants from Beijing. Why? Because he still thinks tariffs are the best, twice telling the Journal that he is a “tariff person,” and citing his decision to use them as evidence of his intelligence. (“I happen to be a tariff person because I’m a smart person.”) And don’t even think about blaming tariffs for G.M.’s plight. Tariffs, much like the president’s favorite child, are perfect and unimpeachable:
https://www.vanityfair.com/news/2018/11/is-trump-going-to-bury-the-auto-industry-in-a-shallow-grave
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