General Motors: Trump Tariffs Could Lead to GM Downsizing in USA

More Trump supporters may be losing their jobs or facing vastly higher auto prices if the narcissistic cretin-in-chief in the White House proceeds with his ill-conceived tariffs.  Instead of increasing American jobs, the tariffs seem headed toward forcing U.S. manufacturers to move operations out of the USA as Harley-Davidson has announced it is doing.  Now, General Motors is warning that it will take a similar path if Der Trumpenführer continues his push for tariffs.  The good news, of course, is that the job losses will be concentrated in states that went for Trump.  If this happens, karma will certainly bite those who allowed racism and bigotry to dupe them into voting against their own economic best interests (as you can tell, I have a very hard time feeling even a shred of sympathy for these people).  Bloomberg looks at what Trump voters may have rain down on them if GM proceeds with moving operations out of the USA.  Here are highlights:

General Motors Co. issued a stern warning to the Trump administration that it could shrink U.S. operations and cut jobs if tariffs are broadly applied to imported vehicles and auto parts. “Increased import tariffs could lead to a smaller GM, a reduced presence at home and risk less -- not more -- U.S. jobs,” the nation’s largest automaker said in comments submitted Friday to the Commerce Department.

That such a blunt statement came from GM -- a company run by a CEO, Mary Barra, whose normal tack is to avoid the political fray and let trade groups address the president’s policies -- was surprising to industry observers. And it underscored how high she, and many industrial leaders, believe the stakes are as [Trump] the president sinks the U.S. into tit-for-tat trade squabbles across the globe. GM’s public pronouncement follows similar moves by Harley-Davidson Inc., Toyota Motor Corp. and Daimler AG.

The “comment suggests how severe the impact would be to GM, its employees and consumers," said Michelle Krebs, analyst with AutoTrader.com. "There is a lot at stake for GM, the auto industry and the overall economy."

The probe has raised alarm among manufacturers, parts suppliers and auto retailers because all major carmakers -- including GM and Ford Motor Co. -- import a substantial share of the vehicles they sell in the U.S. from other countries. Levies on parts also would have major implications for top models like the Ford F-150 pickup and Toyota Camry sedan by boosting prices by thousands of dollars.

Barra had earlier tried to stay on good terms with Trump. She continued to serve on his Strategic and Policy Forum even after many other CEOs, such as Walt Disney’s Bob Iger and Tesla’s Elon Musk, quit to protest Trump’s withdrawal from the Paris climate agreement last year. The forum was disbanded in August following Trump’s tepid response to attacks by white supremacists in Charlottesville, Virginia.

Now, the Detroit-based maker of Chevrolet, Cadillac, Buick and GMC vehicles is warning that additional tariffs -- on top of those recently slapped on steel, aluminum and Chinese products -- could hurt GM and ultimately its customers. Higher prices would crimp sales, particularly to less-affluent consumers, and reduce the number of factory workers needed, it said.

“The threat of steep tariffs on vehicle and auto component imports risks undermining GM’s competitiveness against foreign auto producers by erecting broad brush trade barriers that increase our global costs, remove a key means of competing with manufacturers in lower-wage countries, and promote a trade environment in which we could be retaliated against in other markets,” the company said.

GM’s Chevrolet Silverado pickup was the top-selling model imported from Mexico last year, while the Chevrolet Equinox crossover was the leading vehicle sourced from Canada, according to LMC Automotive.

“GM imports a lot of pickup trucks from Mexico, so it’s a huge issue,” Alan Baum, an auto analyst in West Bloomfield, Michigan, said. “And for parts, it’s not just GM. Everyone imports a lot of electronics from Asia. Those are are high-value parts.”

Hate and bigotry often carry a high economic price - look no further than economically depressed Southwest Virginia for a case in point. 

Republicans For Sale to the Highest Bidder

I just finished reading "Gilded Lives, Fatal Voyage," which follows various First Class passengers on the Titanic on its ill-fated maiden voyage.  Frankly, the individuals followed in the book who lived in America's first Gilded Age would be shocked by the greed and avarice of today's plutocrats who view the majority of Americans with even more disdain than how the third class passengers were treated on the night of April 14/15, 1912 - most were kept from the boat deck until most of the half-filled lifeboats had been lowered away.  Can one picture David or Charles Koch remaining on board following the code of women and children first so that a young immigrant woman might survive as did John Jacob Astor and many other captains of industry 102 years ago?  I can't!  But I digress in part.  Recently, an unseemly parade of Republicans could be seen pandering and prostituting themselves to the always slimy billionaire Sheldon Adelson who is basically looking for a 2016 GOP presidential candidate for 2016.  The eagerness to sell one's self to the highest bidder ought to disturb those who still believe in American democracy.  A piece in the Washington Post looks at this round of GOP prostitution.  Here are excerpts:

Who wants to marry a billionaire?  John Kasich does. So do Scott Walker, Chris Christie and Jeb Bush.

When Sheldon Adelson, the world’s eighth-richest person, according to Forbes, let it be known that he was looking for a Republican candidate to back in the 2016 presidential race, these four men rushed to Las Vegas over the weekend to see if they could arrange a quickie marriage in Sin City between their political ambitions and Adelson’s $39.9 billion fortune.

Adelson was hosting the Republican Jewish Coalition at his Venetian hotel and gambling complex, and the would-be candidates paraded themselves before the group, hoping to catch the 80-year-old casino mogul’s eye. Everybody knows that, behind closed doors, politicians often sell themselves to the highest bidder; this time, they were doing it in public, as if vending their wares at a live auction.

Kasich, the Ohio governor, kept addressing his speech to “Sheldon,” as if he were having a private tete-a-tete with the mega-donor (Adelson and his wife spent more than $93 million on the 2012 elections) and not speaking to a roomful of people.

Walker, the Wisconsin governor, pandered unabashedly by giving the Hebrew meaning of his son Matthew’s name and by mentioning that he displays a menorah at home along with the Christmas tree. And Christie, the New Jersey governor, gushed about his trip to Israel and the “occupied territories.”  

That was a gaffe. Pro-Israel hawks consider the term pejorative and, at any rate, the more relevant occupied territory at the moment is the Republican Party — wholly occupied by billionaires.

In addition to Adelson, two of the world’s other top-10 billionaires, David and Charles Koch (combined net worth: $81 billion) are pouring tens of millions into the 2014 midterm elections in an effort to swing the Senate to Republican control. These and other wealthy people,  . . . . are buying the U.S. political system in much the same way Russian oligarchs have acquired theirs. 

This pay-to-play culture is, at best, unseemly. What makes it ugly is when it becomes obvious just how much the wealthy corporate interests get in return. As it happens, two such instances were on display Tuesday on Capitol Hill, as one congressional committee examined how Caterpillar Inc. avoided paying billions of dollars in taxes while another panel probed how General Motors was allowed to produce cars with a lethal safety defect for more than a decade. 

A Senate panel examined how Caterpillar, using a tax loophole, shifted profits from the United States to its affiliate in Switzerland, where it negotiated a special tax rate — thus cutting its U.S. taxes by $2.4 billion.

In the case of GM, the company knew about a problem in some of its ignition switches since at least 2001, but it didn’t do anything until this year, after at least 13 people had been killed. 

The original Gilded Age was great for the wealthy but not so great for everyone else.  Yet the GOP and its billionaire bank rollers seem hell bent to take us back to those bad old days when most of us were viewed as easily expendable at best and less than human at worse. 

GM Close to Bankruptcy Filing

While General Motors and the other big three automakers have made plenty of insanely stupid decisions over the years and in some ways deserve to fail as a result, the impact on the larger economy will be severe if GM goes under. But what will be a bad recession for the larger economy will be a down right depression for many areas that rely on auto plants for their livelihood. The Washington Post has a story on one such area of Ohio and what could happen is terrifying to the local populace. Never in my life time do I remember economic matters so dire, and I was born when Truman was still president. GOP senators either do not get the picture or, more likely, do not care - after all, many of these folks are evil union members. Here are some highlights:

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LORDSTOWN, Ohio -- Elsewhere in the country, the question of whether the government should bail out U.S. automakers unfolds as a debate over political principles of free-market ideas and corporate responsibility. But here in the Mahoning Valley, people wonder: If General Motors goes down how will we get by?

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The GM plant in Lordstown is one of the few pillars propping up the sagging Rust Belt economy in the small towns and cities in this area of northeastern Ohio. In Lordstown, the plant accounts for more than 70 percent of the tax base. It employs 4,250, paying people some of the best wages around, and sustains an additional 10,000 or so jobs in the companies that supply the GM plant. And as in other places where an auto plant is an economic engine, it's not just auto workers who are worried, but restaurateurs, bar owners, grocers and nearly every merchant in town.

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"Not having GM here would be catastrophic," said Herb Washington, a former star base-stealer in Major League Baseball, who owns 21 McDonalds in the area. "You take that out of here, and what do we have to survive?" . . . We talk about leaving," said Bruce Thomas, 40, who puts in windshields at the Lordstown plant, "but everything I ever had came from GM." His wife works at the plant. So did his dad and her dad. So did two of her brothers. Her oldest brother worked at a supplier.

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The other issue: Who would buy the homes of retreating employees if the plant goes down? "My wife talks about picking up and moving," said Russ Pinkard, 41, a team leader in the trim department. "But no one can sell a house as it is. It will only get worse if the plant closes -- a lot worse."

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This week, Forbes magazine ranked Austintown, the Youngstown suburb that is home to the largest share of GM employees, as the fifth-fastest-dying town in America. In neighboring Warren, home to the second-largest contingent of plant employees, Mayor Michael J. O'Brien said 4,000 of 21,000 houses in the city are vacant.