Your weekly guide to all that sucks in the auto industry and some good bits
Among a contradiction of foes Donald Trump has attacked, the mightiest isn’t China, or even his own all-powerful Republican party, but the American automotive industry. It has power, leverage, and bribes that reach into every corner of American life, and beyond. American cities and entire states depend on the car industry just to get people and stuff around the time zones.
A myriad of small manufacturing companies, plus the tyre making industry, that supply parts to the US giants would go out of business tomorrow if the US halted or slowed down car sales, the most prolific of which isn’t a saloon or a sports car, but a pick-up. Perfectly good models are junked or tweaked annually to keep customers buying the new. We are all suckers for shiny new metal, and a swathe of plastic pretending to be leather. Trump’s conviction – he doesn’t have policies – that US car makers with factories in Mexico should have a 35% import tax slapped on each unit brought into the USA is a sad case of a president mistaking a car for an illegal immigrant.
In the beginning
His interest in aiding the hard done-by, cheated car workers by the bosses, (a worthy commitment) comes from a visit to a dying Detroit, once home of the US car giants, the same Obama helped with billion dollar grant aid in his first term, when it looked as if the biggest were about to go to the wall. It did the trick.
They all still exist, though the weakest, the Chrysler Group that makes the Jeep brand is now in the hands of Italian giant, Fiat. (Fiat entered US life early last century with tractors and banks.) When Obama rescued the Lincoln, the Buick, the Cadillac and General Motors, they had all gotten deep into debt by traversing the globe buying up every car maker that existed. Obama demanded they resold those companies, and they did. Now, back on their feet, or wheels so to speak, Trump is gunning for them.
Mexico’s car industry is an easy target, Mexico soon to be sectioned off by a stone wall mega-miles long, along its border to keep Mexicans out of the land they once owned, California and Texas. Mexico has experienced a considerable boom in its car industry in recent years, as manufacturers look to take advantage of cheap labour and ease of trade access into the US, which, according to some – including Trump – is to the detriment of American car-building jobs.
I visited the Toyota headquarters in southern California to test drive a car and it was like arriving in a different country. The conurbation is vast. Acres of offices and factories stretch in all directions. Toyota has a vehicle for every task known to mankind. A car or a pick-up is an absolute necessity to get around. In fact, some people put their wealth into a quality car and park it next to their flimsy lifestyle trailer, their permanent home. Some people live in the car.
Toyota’s headquarters has its own mini-city with shops and banks, it’s that big. Toyota sells thousands of vehicles a year in the USA. American staff give Toyota the sort of loyalty you expect them to give to the Stars and Stripes. How big?
There is a scene in the movie La La Land where the courting couple leave a venue to reach a car. “What’s your car?” says the Gosling character. “A Prius” she answers, referring to Toyota’s hybrid family saloon, the joke being that eco-friendly California is always ahead of the automotive curve – the entire street is lined with Prius as far as the eye can see. In fact, so reliable are Toyota parts that they end up in all sorts of marques you’d never guess would want a Japanese part, such as Porsche, but they won’t tell you that. That aside, critics of Trump’s kick a target a day were quick to point out that Toyota’s new plant would be in Guanajuato, and that US employment would be unaffected.
Trump’s vow to introduce a 35% import tax came shortly before Hyundai raised its investment in the US from just over $2 billion, to $3.1bn (£2.5bn) over the next five years, according to Reuters. Currently, Hyundai builds more than half of its US model range domestically, and has facilities in Alabama, Michigan and California. So far, the company has remained diplomatically silent, but that might change if Trump picks on them.
A BMW is as prized an executive saloon in the east and west coast as it is in the United Kingdom. People who buy a BMW don’t buy Mercedes, and vice versa. BMW has been more troublesome for Trump; the president-elect took on the car maker directly, criticising the Munich-based brand for its current Mexico plant and plan to expand its manufacturing operations there. Germany’s deputy chancellor advised the US to “build better cars”, when asked how the US could ensure more American cars are bought in Germany.
BMW said: “The BMW Group is very much at home in the USA. We have a deep level of localisation and employ both directly and indirectly almost 70,000 people in the US. Our US production last year hit 411,171 X [SUV] models. This makes the plant Spartanburg in South Carolina the BMW Group’s largest factory worldwide.”
General Motors (GM) has four Mexican production plants. Being US owned it did a smart side-step. One set to Trump. It announced a $1bn investment in the US not Mexico. The company maintain their decision is not in reaction to Trump’s comments yet the timing says otherwise. For example, GM confirmed one of it suppliers has committed to make components for GM’s next-generation full size pick-up trucks in Michigan, moving 100 supplier jobs from Mexico to the US.
GM’s US production facilities currently outnumber its Mexican factories eleven to four. CEO Mary Barra said: “The US is our home market and we are committed to growth that is good for our employees, dealers, and suppliers and supports our continued effort to drive shareholder value.”
Mercedes-Benz’s future plans to share assembly in Mexico with Renault-Nissan caught Trump’s attention. Trump thinks all German brands are essentially the same brand – German. Blind racism has no limits. Mercedes was lumped in with Trump’s criticism of German brands, as well as Germany on the whole. Mercedes hasn’t backed down on the plans, as Germany’s deputy chancellor appears to be defending the German car industry – and immigration policy – overall.
Ford is a company with a notorious history of aiding and abetting dictatorships when present in those countries. Time spent in various South American countries is a litany of anti-union practices, and workers disappearing in the middle of a night shift, never to be seen again. Each year people lie in the street in memory of thousands who were spirited away in the night by Chilean dictator Pinochet’s armed guards. Their support of counter-revolutionary groups has often been blatant, and in accord with whatever is US presidential policy. Ford’s founder, Henry Ford, was an admirer of German fascism, and created his own version in non-stop conveyor belt manufacturing, the inspiration for Charlie Chaplin’s dystopian factory scenes in The Great Dictator. No wonder then, that compliance with a brutal regime is a Ford tradition.
I am sure whatever president Trump deems is right for Ford, Ford will comply fully. We have enough evidence already. The company is one of the only manufacturers playing ball with Trump’s tax plans, having cancelled a $1.7bn Mexican factory immediately Trump picked up his megaphone, instead driving $700 million into a Michigan-based plant.the new business ethic.
Tesla is the new kid in the block. It makes electric cars, and is the brainchild of PayPal founder Elon Musk. There’s one passes me by same days each week, sleek, silent, and almost nondescript. It can charge off into the sunset 0-60 mph in 2.7 seconds, faster than a shop assistant can take my money from my bank card and put it into their bank account. Musk has opened showrooms worldwide, one in Edinburgh already selling its cars. They are expensive, but then so were colour television sets before they became the thing to have. Tesla won’t take kindly to be constrained in any way. Musk believes he is spearheading a revolution in transportation. (He’s also patented the solar roof tile.) Spanners are sure to fly at political heads if Trump’s management style cabinet tries to dictate policy.
The trick will be Trump’s ability to claim credit for any foreign investment switched to the USA, and more importantly, that it actually created more jobs than exist now. But that depends on ever-increasing car sales, not on Trump diktat. Watch this space.
For opinion on Trump man and half-biscuit read ‘Trump – What Now?’ Click on: http://wp.me/p4fd9j-b61: