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GM buys thousands of employees and closes six plants, including four in the United States. Which makes Donald Trump angry. But he also bears a share of guilt for this decision, writes journalist Henrik Böhme in a comment for Deutsche Welle.
Of course, others are to blame. Of course, the decision by General Motors (GM), the largest US automaker, has nothing to do with politics. Of course, GM's boss has chosen to "put the wrong people". Of course, GM must stop producing cars in China, but it would be good to open a factory in Ohio as soon as possible. That's how Donald Trump sees the world in so simple colors and lights. But this is not the case.
General Motors, a symbol of the American industry that makes famous brands such as Chevrolet, Cadillac or Buick, has no other form than the other major automakers of the world. They all face tremendous changes. It is necessary to abandon the conventional combustion engine and move on to alternative engines and autonomous cars (without driver). It's a paradigm shift, even though all four-wheeled cars will eventually come out of production groups. But to build these new cars, it takes less people. And automakers need to invest heavily to stay competitive in new operating conditions.
This is a similar situation at Volkswagen. And here, the main concern is the future (besides the resolution of the consequences of the scandal Diesel). And thousands of jobs will disappear at VW, but in a more socially acceptable way, as is the case in Germany. But they still invest billions in the future. To be more specific, 44 billion euros will be invested over the next five years in self – driving, self – management, mobility and digitization services. Investments without which the car manufacturers, already known, may lose their relevance in the new market context. VW seems to have learned the bitter chapter of Dieselgate.
But let's go back to Donald Trump.
Trump's rigid economic policy seems to be the result, especially the punitive trade measures taken against China, its favorite economic enemy. The US economy has grown considerably in recent times and the labor market has also brought good news. The experts concluded that the current war on tariffs practiced by Washington and Beijing was mainly damaging to the Chinese, while the US economy seemed to benefit. But back to the US auto industry, this is one of the major sectors of the economy that has suffered punitive tariffs on steel and aluminum imports.
Already in the last quarter, GM had announced higher production costs of $ 300 million, as the company had been forced to pay more for steel and aluminum. Analysts have calculated that cost increases have already reached $ 1 billion. GM and Ford are also facing a similar situation. If Trump now asks GM's only chief executive, Mary Barra, to stop production in China and bring her back to America, her decision has no chance of succeeding. The automotive industry is geared towards the world and usually produces in the markets where it sells. And even if GM did what the president dictated, the Chinese would immediately impose punitive duties on all GM cars imported from the United States by China.
The problem is complex.
Finally, the President should know that many foreign auto companies own factories in the United States: for example, Toyota or the three big names in the German car industry – Volkswagen, Mercedes and BMW. They produce in their factory in Spartanburg (South Carolina) so many cars that they are the largest American exporter of cars. The leaders of the three German concerts are invited these days to the White House. What does the American president want to talk about? For all the punitive tariffs imposed on German automakers, Trump does not want to negotiate with them at all. Perhaps Mr Diess, Zetsche and Krüger will explain to the President the challenges facing the global automotive industry – and that GM is no exception. Anger does not help. There are realities in which even the great Donald Trump can not close his eyes. (Source: Deutsche Welle)
(Photo source: Fortune.com)
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