Democrats And President Trump Can Both Agree On One Thing Right Now
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Turns out the Democrats are just as upset with General Motors as US President Trump.
A day after General Motors announced a massive restructuring plan that will see jobs lost, cars killed, and plants idled, criticisms were coming in fast and furious from all over the government.
Ohio Senator, Democrat Sherrod Brown, spoke sharply regarding GM’s plan to lay off remaining workers and idle its Lordstown plant in March. The plan feels like even more of a slap in the face than when GM announced the 2019 Chevrolet Blazer would be produced in Mexico on the same day it was due to lay off Lordstown’s second shift, where Chevrolet Cruze production will wind down next year.
“GM received record tax breaks as a result of the GOP’s tax bill last year, and has eliminated jobs instead of using that tax windfall to invest in American workers,” Brown said in a statement released by his office. According to GM’s most recent earnings report, the company has gained $157 million so far this year thanks to tax legislation passed last year by the Republicans. President Trump has threatened to cut these acts of corporate welfare.
But the Democrats weren’t about to side with Trump. According to The Detroit Free Press, Ohio’s blue Congressmen, Tim Ryan, criticized the President’s attempt to keep jobs in Ohio via tax cuts. “So far, President Trump has been asleep at the switch and owes the community an explanation,” said Ryan. “We tried to get his attention on this issue two years ago. He promised us that his massive corporate tax cut would lead to dramatic reinvestments.”
Flint’s Democratic Representative, Dan Kildee, said GM should reconsider because both the American people and the federal government have always stood with General Motors, before adding “the industry should have the back of American workers.” While Michigan Senators, Gary Peters and Debbie Stabenow, both cited the devastating impact this was likely to have on families and communities, especially with the announcement coming so close to the holidays.
Trump’s tax cuts may have been beneficial to the automaker’s bottom line, at the same time his tariffs and trade disputes are generating new, unforeseen costs for the industry as a whole.
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It’s funny no Euro nor Asian companies cut and slash they way to profit but American companies, specifically Wall St. influenced companies (An institution that failed in 1929, 1958, 1987 and 08) can dictate how money can be made. GM failed in 08 using the Wall St method but the same short-sighted, system is being used now. This Wall St virus must end, start with Bloody Mary’s firing…
There’s several factors in GM’s restructuring but the main one is GM is creating products that no one is buying. The cars they cut were all sedans. No one’s buying sedans these days. People are buying crossovers instead. And when they buy crossovers, they’re not buying GM. If they buy sedans they buy European or Asian. It really doesn’t have much to do with “Wall Street”… (Wall Street is just a name for the American economy, and economics, like most things, have a natural ebb and flow. You can’t get away from it when trying to sell something on such a drastic scale.) It mostly has everything to do with the consumers preference for the type vehicles and what manufacturers they buy from. Why we aren’t seeing Asian and European auto manufacturers “cutting jobs” or “restructuring”, is because they are making a profit in other parts of the world where the demand is more likely to be sedans. They’re selling cars people actually want. So if they’re is a loss in profit by selling a car where there’s not a strong demand, they can hedge it or spread out the cost where the demand for those types of cars are stronger in those markets. GM can’t sell cars in Europe, Asia… or the rest of the world that’s not U.S. (except China where the preference for the type of vehicle is more varied with a market that’s 4+ times the u.s. The labor is cheaper there so why not let them build their own cars.) It’s simply supply and demand and unfortunately the Americans that lost their jobs were building vehicles that not a lot of people want. I hate they’re doing this, it’s their fault for not figuring out a way to be competitive with foreign manufacturers, but also the market has changed in favor of crossovers. This failure started long before Mary Barra became CEO. After the recession/bailout, GM failed to capitalize on a new start. Some parts of GM did creat great products. But the majority of the company has been ran in a way that was similar to what got them into bankruptcy in the 1st place…. being oblivious to their faults. They’re gonna bean count their way into a bean covered grave. Your average car consumer aren’t auto aficionado. But they’re not stupid. For such big purchases, who doesn’t turn to reviews. And most reviews were average compared to others. Most GM products weren’t recommend compared to the competition. So your average consumer doesn’t buy GM. You would think after they failed to stay afloat during the recession they’d finally figure how to sell products people want. But nope. They didn’t. After the 1st generation of cars with marginal sales, they ignored the gripes of reviewers and still continued to build cars in the same manner! CUE was terrible! What did they do? Nothing. It was still terrible! It took 4 model years and a new generation of cars for them to finally get it right. They just waited until they had to invest in a new generation of vehicle. The interiors get shamed every. single. review! People want to sit in a “luxury” feeling car. Why not buy a car from another manufacturer that does it better for cheaper? Even after this criticism is widely known, they still continue to build cars with scratchy plastic interiors! The 2nd gen Camaro is a perfect example. It is a world class handling car! The first generation sold very well. They polled the owners of the 1st Gen Camaro and asked if they like the exterior styling for the sake of visibility. The decided answer was yes. “We love the looks over the terrible visibility.” So what did GM do? They built a fresh 2nd gen Camaro with the same problems reviewers had with the 1st Gen. The Camaro was built from 2010-2015 model years. What GM never realized is most of the people they polled about the 1st Gen Camaro, still owe money on their car! They’re not in the market for another car. So GM’s market for the Camaro already had a Camaro! …And that is the 1st Gen Camaro they’re still paying for! The people that didn’t buy a 2nd Camaro, didn’t buy a 1st gen! The Camaro is like the Corvette. Bang for the buck. A cheap car with a lot of performance. What does that say about their buyers? They can’t afford or don’t want an expensive car. They are, at the very least, more frugal buyers. But GM seems to think that the person who buys a Camaro is the same type of consumer that buys BMW or Merc. The type of consumer that doesn’t mind or can afford a monthly car payment beyond the foreseeable future. There is a huge contrast between these types of consumers that GM fails to realize. This is a few of many mistakes GM can’t or will not recognize. I would say until they do, they’ll be successful, but I think it’s too late. That’s why we are seeing a restructure. Electric cars and crossovers. Because that’s the future… and that’s what’s preferred in U.S.
“The 2nd gen Camaro is a perfect example. It is a world class handling car! The first generation sold very well. They polled the owners of the 1st Gen Camaro and asked if they like the exterior styling for the sake of visibility. The decided answer was yes. “We love the looks over the terrible visibility.” So what did GM do? They built a fresh 2nd gen Camaro with the same problems reviewers had with the 1st Gen.”
Dude, you’re way off base. Your understanding of the Camaro generations is all wrong.
Yup you’re right. My mistake. I meant 5th & 6th gen respectively. I guess in my mind I was calling them the 1st & 2nd gen Camaro after they brought it back. ?
I agreed with you until you called for Mary’s firing. This is not entirely on her. I think Americans really need to suffer before they realize Trump is not saving manufacturing in this country. Unfortunately, the corporations have stolen from us, left us in with huge debt and further squeezed the middle class. I don’t know where the hell we go from here.
She could had gone against the Wall St. tide but looking at her track record as CEO it’s disappointing. At least “Red ink” Rick had similarity concentrated on products while cutting the fat because GM had no money. GM sits on billions and cuts almighty with dull products. Margaret Thatcher is running GM in the ground here (she did kill the British car industry BTW.).
This is a good time for GMA to re-cap activist investor & GM boardroom level news from the last few years for us economic laymen.
The stated reason for this restructuring was to free funds to becoming more of a tech company. So, why was the Einhorn idea of a non-dividend class of stock to raise capital rejected?
Ignoring the efficient allocation of vehicles to plants (now with major job losses) looks really bad when considering they spent many billions on the Wilson/David Tepper stock buybacks. I would very much like to see any relevant SEC disclosures published.
Interesting article from the Detroit Free Press….
https://www.freep.com/story/money/cars/general-motors/2018/11/28/gm-plant-closings-jobs/2137547002/
Russian Toadie Korean Boyfriend Imbecile-in-Chief believes that if he gives corporations a tax cut that they will do what he wants. Instead of what they want. Last time I checked the art of any deal requires a contract. Not faith from a dude who lusts after his daughter.