In addition to trying to stifle journalists (me) it deems politically incorrect, GM has also made some less than smart business decisions lately.
For a year and a half now, Donald Trump has made Ford Motor Co. his automotive punching bag, while General Motors, following the conventional advice for encountering a grizzly bear, tried not to make any sudden movements that might attract his attention.
Both companies have been investing heavily in Mexico, but Trump kept singling out Ford in his attacks, which consisted more of rhetoric to incite the crowds at his rallies than actual facts.
In one day, Ford managed to flip the narrative. Suddenly, Ford has become the American automaker investing in America, while GM is printing up layoff notices that will go out to 2,000 workers in Michigan and Ohio just as Trump is taking office.
Ford, after insisting throughout the presidential campaign that its plans for Mexico were set in stone, has now handed Trump two gift-wrapped victories since the election. First was the reversal of plans to move Lincoln MKC production out of Kentucky. Now it canceled an entire $1.6 billion plant, choosing to spend less than half that amount in Michigan instead.
And hours before announcing that stunning turn of events, Ford scored a victory for itself when Trump tweeted an attack on its archrival. Trump told his millions of followers that GM was importing Mexican-made Chevrolet Cruzes and threatened a “big border tax” if it didn’t start making them in the U.S. instead.
Blowback’s a bitch!
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The thing you guys all miss in this. No one at GM or Ford cares. Their Executives and upper management are all making huge sums of money and when the company goes in the toilet they will just go on and do it again. Most of these guys are worse than not worth their salary, they actually do harm to the companies. As long as they make their giant pay check what do they care.
Trump is a bit screwy as usual. GM assembles the Cruze hatchback for world wide markets in Mexico but the sedan is assembled in the USA. Relatively few of the hatchbacks come to the US.
But then again why margin so poor on small cars? CAFE law forces all automakers to sell as many as possible. So the market is flooded with more small cars than it would ordinarily take so the price goes down.
Every politician is missing a few bricks. That’s why we have the problems we have.
Herein lies the problem with being a crony capitalist. Sure, you have Uncle running interference for you. Uncle also is happy to help you out if you get yourself into a bind. But eventually, no matter how loyal you are, you’re going to screw up. Because Uncle is fickle. Because Uncle is vindictive. And Uncle takes care of his own. And so you’ll end up with a horse head in your bed no matter what you do.
That’s what I have always said about crony capitalists too. Government is the bed fellow you never want, ever. One day you won’t be favored (or needed) anymore. Then the weight of government crushes you too. It has no compunction for anybody or anything, it only waits for the right time.
When it knows it can get away with complete finishing off the private individual auto market it will do so. It’s only waiting for us car guys (and gals) to be the minority. Then GM, Ford (Chrysler probably will die long before that) will be goners.