Politicians are crazy at General Motors, investors are happy with General Motors, the arrest of Carlos Ghosn blindly French and others are waiting for you in The Morning Shift Tuesday, November 27, 2018.
1st speed: Oh, do you remember this rescue plan? And the tax reduction?
Dude, do you remember when General Motors had a massive federal bailout after the declaration of chapter 11? And then, there has been this huge tax break compared to last year 's GOP tax bill, where did that money go?
Apparently do not to American jobs, when the company announced that it would close several factories in Ohio and Michigan (and Canada, which is not America) and would cut some 15,000 jobs yesterday.
People are upset. Politicians in particular.
Democratic and Republican politicians are crazy, according to Bloomberg. Sherrod Brown, Democratic Senator from Ohio, tweeted although GM has "reaped massive tax relief" last year, it "has not been able to invest that money in US jobs." He called the decision "corporate greed the worst of its consequences".
Democratic representative Tim Ryan, whose district includes the Lordstown plant, wants congressional hearings on how GM has spent the tax cuts.
From the story:
"The American people deserve to know if the tax cuts it's paid serve to inflate corporate profits at the expense of their economic security and the survival of American workers," Ryan wrote in a letter. to the House Ways and Means Committee leaders. . He urged them "to investigate the results of this tax assistance for businesses".
And Ohio Republican Senator Rob Portman (who, as Bloomberg says, helped GM benefit from these corporate tax cuts last year) said, "I am deeply frustrated with the decision from General Motors. "
Democratic Representative Joe Kennedy III tweeted:
Finally, a progressive organization called Not One Penny estimated that GM had saved more than $ 500 million through tax cuts. His spokesman Ryan Thomas said:
"General Motors' decision to empty its workforce embodies the bad corporate behavior that Republicans in Congress have been pushing for generations. Instead of using its considerable tax savings to increase the salaries of its employees or invest in its workforce, GM is closing factories and cutting jobs to increase profits and enrich its shareholders. "
Of course, Michigan and Ohio are the two states that chose Trump in the 2016 presidential election. During his rallies, he promised to "defend" American workers and bring back jobs from the United States. ;foreign. Let's recap what the president said in 2017:
Trump said he was looking at the deflectors of his motorcade – "big factories producing incredible jobs" – with First Lady Melania asking what had happened to the now rusty relics that once constituted the heart of the iron and steel industry. 'Ohio.
"I said, these jobs have left Ohio. They all come back. They all come back. Do not move, do not sell your house, "said the president to the public.
So much for that! Naturally, the President is angry at Mary Barra, CEO of GM, as recapitulates the Wall Street Journal:
On Monday, Mr Trump told Ms Barra that she should stop making cars in China and open a new factory in Ohio to replace the one that is currently closing its production.
"They'd better open a new plant there very quickly," Trump said in an interview with The Wall Street Journal on Monday, noting that he had spoken to Mrs. Barra on Sunday night.
"I like Ohio," said Mr. Trump. "I told them," You play with the wrong person. "
Trumbull County, home of the Lordstown plant, gave Trump 51 percent of the vote, after 60 percent voted for Barack Obama in 2012.
There is a lot of screaming, but it looks like GM's decision is made.
2nd gear: it's just business
While GM's cost cutting and restructuring decisions have irritated employees and elected officials, investors and analysts seem to be delighted.
When news of its new management was announced yesterday, shares rose 4.8%. Apparently, people are happy with this "new GM" to deal with the problems.
Maryann Keller, an independent automotive analyst and chief editor at GM, says it's all part of business, according to Bloomberg. She says:
"In the past, GM management did not react as quickly. It suffered a kind of low-speed crash that ended in the bankruptcy of 2009, and it's a hard lesson to remember. This is a cyclical activity, very competitive and slow growing. You can not continue to produce unprofitable vehicles, especially when you make foolish investments in the mobility services sector with no profit potential for the foreseeable future. "
In fact, if you look at the market, what GM is doing is not that different from what Ford did, which is that its production lines are turning to SUVs, electric cars and autonomy, and reduce costs, because nobody buys small sedans. This is a radical move, but that could save him from a new 2009 edition, which was a financial crisis and a bankruptcy.
Anyway, worried that workers will lose their jobs as the class of investors increases, but that's the game!
3rd gear: Let's try socialism, huh?
And now, something you've never seen in America: why not simply nationalize GM?
"Now is the time," says David Olive in The Toronto Star in response to the announcement that GM would close its assembly plant in Oshawa, Ontario, "to think seriously about the creation of the country's largest automaker."
He adds that Canada has been building cars longer than Toyota and is home to independent, innovative giants of auto parts. These companies serve companies around the world, while Ford, FCA, GM, Toyota and Honda are primarily involved in the US market.
Olive's solution? Canada buys GM Canada. By his editorial:
By purchasing GM Canada in its entirety, Canada would have a major vertically integrated automaker. GM Canada operates parts assembly and fabrication plants, engineering laboratories, distribution centers, a national dealer network and a cold weather test center in Kapuskasing.
A new organization, GM Canada, would design vehicles for Canadians. And, learning from this, it would design winning vehicles for niche markets around the world, becoming a geographically diversified company. It would export to major and emerging economies. These are the most dynamic markets in the world, where "Canada" enjoys a high and favorable recognition of the brand.
And an independent Canadian manufacturer would no longer be tied to the production of marginal GM products, which has been the fate of GM Oshawa many times.
It is true that Canada does not have its own manufacturer, despite the construction of cars by all the others. Olive thinks a Canadian automaker would not screw up Canadians like a shitty American just did. He concludes,
According to the old expression, we act or act. We let GM act on us in a rather unpleasant way.
There are other examples of damaging branch impacts on Canada. But for now, let's do an example of GM. And we'll see how that goes from there.
You can read the rest of the fire here.
4th gear: 'It's complicated'
Back to Nissan-Renault! Nor should we forget Carlos Ghosn after all the awesome GM news yesterday. If you wake up very surprised at the news of his arrest after charges of alleged underreporting of his income and use of the company's funds for personal purposes, you are not alone.
The arrest apparently would have blinded the French, according to Automotive News Europe. From the story:
The arrest of Ghosn seems to have been a surprise for Renault and the French government, Renault's largest shareholder. Last week, the two countries switched to damage control, with the government expressing its support for the Renault-Nissan-Mitsubishi alliance, and Renault appointing a co-CEO to take over Ghosn's functions and starting an internal audit to to review the remuneration of Ghosn.
However, neither the government nor Renault officials offered Ghosn's personal defense. Finance Minister Bruno Le Maire said Ghosn was not able to continue to lead Renault. He has repeatedly expressed hope that the Renault-Nissan-Mitsubishi alliance – which he described as "indispensable" Sunday preserved.
Of course, conspiracy theories also fly, and it's always fun to think about that. One of them claims that Nissan CEO Hiroto Saikawa apparently felt that Mr Ghosn had "accumulated too much power" and wanted to change the alliance more favorably with Nissan.
This would explain why Saikawa told reports that the arrest was not a "coup" during his press conference and that there was not much information on the charges against Ghosn.
Anyway, a very important CEO / President of a large car company has just been arrested! It's crazy! Of course, things will be complicated for a moment. We will see more details about this.
5th speed: meanwhile at the FCA
While everyone shouts at / about GM and the Renault-Nissan-Mitsubishi alliance, Fiat Chrysler is trying to improve margins by perhaps building more cars in Italy.
Unnamed sources said the FCA would build a "group" of new cars in Italy, which could include Jeeps and a sort of Alfa Romeo SUV, according to Reuters. The plans are part of the strategy outlined by Sergio Marchionne before his death. From the story:
In its latest strategy unveiled in June, Marchionne promised to continue converting Italian factories to produce Alfa Romeos, Jeeps and Maserati instead of less profitable vehicles in the mass market to preserve jobs and increase margins.
The Melfi plant in southern Italy is expected to build the Jeep Compass and is already building the Jeep Renegade. The Compass will be the replacement of the Fiat Punto. The Pomigliano factory could continue to build the Fiat Panda and could also be equipped with the new Baby Jeep, which would be part of the Renegade group for the European market. The Mirafiori plant in Turin could start manufacturing the Fiat 500 electric, although these plans are not yet final.
And the next Alfieri from Maserati will probably be built in Modena, where the brand is based.
Well, everything is fine. Continue, FCA.
Reverse: Dance with a champion
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Neutral: Is GM the bad guy here?
Or are these cuts and closures a business?