GM cancels 15,000 jobs: Trump's customs policy is booming

economy

Tuesday, November 27, 2018

By Diana Dittmer

In fact, Donald Trump wanted to bring back factories and jobs to the United States. But now, with GM, the largest US automaker closes four factories and removes all six spots. This is a resounding slap in the face of the "America First" policy.

Donald Trump had not imagined that with America First. When Fiat announced in January that Chrysler would leave Mexico for Michigan, US Vice President Mike Pence triumphed on Twitter: "The America First Policy Works!" The fact that General Motors, the largest US automaker, is cutting thousands of jobs and closing four factories in the United States alone, is a slap for Trump.

The president's goal was to bring jobs back to the United States that had migrated for decades to low-wage countries. Above all, the domestic auto industry, which had established itself in Mexico, was forced – under pain of punishment – to fulfill its obligations.

This badet is now foamy, so do not be surprised. GM director Mary Barra has felt the intense anger of the president: she now has "a problem," Trump told him, "The Wall Street Journal." The government has done a lot for GM in the past. We could put pressure on the group, Trump should have threatened.

What Trump does not see is that his customs policy has at least greatly contributed to the determination of the Detroit leadership. The group's CEO, Barra, badured him that the decision had nothing to do with his protection obligations but only because of the meager sales figures of the group. But it is clear that the trade dispute has not helped GM or the other American manufacturers. The Group faces not only shrinking sales figures, but also rising materials costs, as Trump has put in place protection rights on aluminum and steel.

Already in the last quarter, the additional costs were $ 300 million. And that could become more. Analysts are already expecting additional costs of $ 1 billion resulting from the tariff dispute between the United States and China. Similarly, Trump's trade policy will probably leave a mark in the balance sheet of its rival Ford.

The prices of steel and aluminum, but also the import duties on cars are the cause of car manufacturers. The hiring of production in China, as Trump wishes, is not an option for GM. Building cars for the Chinese market elsewhere than in China would be foolish. On the other hand, Beijing would impose tariffs on every GM car imported into China. Trump's bill with "America First" does not work for the auto industry and its global production chains.

Customs poker is fast approaching

For the industry could be much thicker soon. The customs war between the United States and Europe is just beginning. At the beginning of next year, they want to enter into "real negotiations" for a US-European trade agreement., A solution is planned for February. Observers are already counting on the worst. According to studies, thousands of jobs in the US auto industry could be threatened if the spiral of tariffs went really well.

In addition, the sector is facing an unfavorable phase of the trade dispute. Technological change with electronic mobility and autonomous driving is fast. GM faces these developments if the group does not want to be swept away by competition. And for that, he needs billions.

Mary Barra "does not want to be sidelined and sells bads for horse-drawn cars," says CNN station Jeffrey Sonnenfeld of the Yale School of Management. There are too many companies that have fallen in love "at the expense of the future". Barra "does not want to be Kodak, GE or Sears".

GM needs to cut costs for that. The competitor Volkswagen does not make the difference. The Wolfsburgs have recently launched new investment plans. Take steps to succeed in the long run now, while the economy is strong and business is going well, Barra justifies his timing. She wants her group to still exist after the Trump administration.

Trump castles in the air burst

The numbers prove it: according to Bloomberg, global sales of electric vehicles are expected to reach 30 million by 2030. In comparison, last year was just over a million. In 12 years, more than one in ten cars sold in the United States will be an electric vehicle. "Technology is evolving by leaps and bounds," said CNN, an badyst at Edmunds. The car manufacturers have adapted to "survive".

Not only for Trump, but also for the good faith voters, the news of the plant closure is devastating. The castles in the air that the president built around America First and a revival of jobs in production are bursting.

He supported Trump in the election campaign because he and his colleagues had hoped, according to the British Guardian newspaper, which quotes a former GM worker. It has never been so political. He spoke from Trump and thought the jobs would come back. But all he sees two years later is more and more jobs destroyed.

Source: n-tv.de