The ongoing trade war between the United States and China is complicating the already contentious contract negotiations between the Detroit Big Three and the United Auto Workers union, a number of experts told The Detroit News.
China imposed fresh tariffs on US-made goods last week, including a new 25% tariff on American-made vehicles, which comes in addition to the existing tariff on vehicles made in the US and brings the total taxed amount to just under 50%.
The trade row has cast a shadow of uncertainty over the automotive industry. Not only do automakers source some parts from China, the country is also the world’s largest automotive market, so the economic situation there can have a major affect on their global business strategy.
Now the Big Three must hash out a contract whilst being uncertain about the health of the world’s largest automotive market. Complicating the issue is the UAW’s firmly-held desire to secure raises for its members – a concession it says is justified by the success companies like General Motors and Ford have experienced in recent years.
“The overall interaction of trade, fuel economy and the economy overall, plus the demand for vehicles over the next four years, makes for a very difficult environment to negotiate an agreement,” Kristin Dziczek, vice president of the Center for Automotive Research, told The Detroit News.
In response China’s recently imposed tariffs, president Donald Trump ordered American companies to “start looking for an alternative to China,” with regards to business and to begin making more products in the USA.
“We don’t need China and, frankly, would be far better off without them,” the president said in a tweet.
Pulling out of China isn’t really an option for GM, however. While the US still generates most of the automaker’s profits, the bulk of its sales are done in China, so the country has the largest growth potential for the company. Without China, investors would have little reason to believe in GM’s growth potential.
Meanwhile, a strike authorization vote is being held at UAW local offices across the United States. While the strike vote does not necessarily mean the UAW will strike, a ‘yes’ vote would mean that UAW officials are able to threaten automakers with strike action whilst at the negotiating table. The results from the strike vote are expected to be released this weekend.
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Source: The Detroit News
Comments
Typhoid Mary ought to kiss Trumps ring as this move helps GMs bargaining power. The UAW needs to die and if they strike GM will move more jobs out of the US until it does. I don’t know how many American cars are imported into China but their tariffs are decades old and huge. The Chinese “have” an auto industry because of their tariffs so this is nothing new and GMs growth plans have little to do with importing vehicles into China vs from China. A good balance is needed but GM needs to compete and the UAW harms that ability. That said China cares only about China and its about time we stood up to them! MAGA! Go Trump
the world needs to stand up to china but unfortunately bone spurs is the torchbearer who has alienated our allies.
china knows he needs a deal more than they do at this point and they are going to squeeze that orange pustule until he pops.
The only pustule is your fat @$$. They need us more than we need them and our allies need to get on board. Trumps dealing with the acquiescence and incompetence of Barry the Stain… only an idiot would say we need them and clearly u fill the bill
trump grabbed his ankles after the market dropped last week. as the election nears, he is going to do more than that.
i’m sure you ate up his lie when he said china’s reps called him begging for a resumption of talks.
whatever happened to “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing .your companies HOME and making your products in the USA”?
oh yeah that’s right, nobody believed that either except maybe you.
You’re a pathetic loser, he never “ordered” anyone to do anything so STFU. Enjoy your hate you pathetic moron…. Barry is being erased and Trump is awesome…. so suck it…
the uaw president’s home just got raided by the feds.
https://www.autonews.com/executives/uaw-presidents-home-targeted-part-federal-raids-reports-say
Bout time !
This explains the situation quite well:
https://www.foxbusiness.com/economy/europes-shame-at-g7