Trump Knows the Correct Number of Cars GM Needs to Produce

-edited

GM wants to close unprofitable plants. Trump and the unions demand GM keep the plants open.

On Wednesday, GM Will End Production at its Lordstown Ohio Plant. The UAW and Trump both want Trump to keep producing cars that nobody wants.

General Motors Co said on Monday it expects to end production of the Chevrolet Cruze at its Lordstown, Ohio assembly plant on Wednesday, the first of five plants it is idling this year in North America.

Last week, the United Auto Workers union sued GM over its decision to end production and eliminate thousands of jobs U.S. auto plants, saying it violated a 2015 collective bargaining agreement. The UAW has asked a federal judge to order GM to rescind its November decision to close three plants in Michigan, Ohio and Maryland, and award damages to employees for losses from what the UAW calls GM’s breach of contract.

GM said in November it was cutting up to 15,000 jobs and ending production at five plants in North America, including one in Canada.

The job cuts have angered U.S. President Donald Trump, who has demanded GM find a replacement product for its Lordstown plant and threatened to cut GM subsidies.

Collective Bargaining

One of the obvious problems with "collective bargaining" is that unions can force business owners to do stupid things like making cars at a loss that nobody wants.

Governments do the same thing. It is a fatal flaw of all command economies and ultimately what did in the USSR.

Subsidies

Trump threatens to cut GM subsidies. I am not sure what subsidies Trump means, and perhaps he doesn't either. There are electric vehicle subsidies but those go to the buyer, not GM.

But assuming GM has subsidies, yes, please cut them. Cut all subsidies for every company.

All-Knowing Trump

Last week, at a CPAC 2019 conference, Trump Blasted Powell on Rate Hikes, QT, and the Strong Dollar.

Trump didn’t mention Fed Chairman Jerome Powell by name. But he did reference “a gentleman in the Fed that likes raising interest rates, a gentleman that loves quantitative tightening, and a gentlemen that likes a very strong dollar.”

The message is clear. Trump knows where interest rates should be, what assets should be on the Fed's balance sheet, and how many cars GM should produce, whether or not GM makes a profit on them.

Mike "Mish" Shedlock

Comments (31)
No. 1-10
davebarnes
davebarnes

Because The Dumpster® is a stable genius with a very big brain.

Greggg
Greggg

Lordstown, home of the Vega, another GM prize. BTW, waves of strikes been hitting Mexican factories since the beginning of the year. The "news" here in the US doesn't report it much.

Carlos_
Carlos_

I've been saying for a while that he is a Chavez (Venezuela). All you have to do is watch how each one run/ran the country. People here dismiss this concept because they can't phantom Trump being like a socialist Chavez. However, they are wrong. Chavez as well as Trump were populist and just like Chavez he will ruin the country where they ran.

Six000mileyear
Six000mileyear

Trump will be prove correct, but for the wrong reason. When large groups, organizations, or companies make a decision, it is usually at the end of the trend. In GM's case, the truck/SUV is ending. People will want the smaller, more efficient, more affordable sedan. MISH has shown auto loan delinquencies are on the rise. As people discharge debt in bankruptcy, they won't be allowed to buy truck/SUV. Thier "choice" will be a basic sedan or even a coupe! So GM is completely exposed to trend reversal to basic transportation. GM is no longer diversified in its product mix.

Curious-Cat
Curious-Cat

Tesla, for instance

madashellowell
madashellowell

Wouldn't it be fun if EVERYONE were subjected to a multiyear investigation into EVERY conversation, transaction, email and phone call you have EVER MADE by the highest levels of the federal government employing people who have publicly declared their hate and hopes of your demise? Wouldn't it be even better if EVERY person who had been associated with you was treated to the same experience, secretly recorded and then questioned to test their answers against the "tape" so it could be used as evidence of LYING to government agents, subsequently bankrupted and disgraced over issues of no criminality. Wouldn't ALL of that be FUN? And then the BEST part is that your job performance would be harshly criticized while all of this is happening.

Navian
Navian

Maybe if Ted Cruz was president, the Cruze would sell better. That's how brands work, right? I'm not sure. Either way, sounds like someone else could just buy the plant and build their own preferred products. I don't see why GM has to do it.

Sechel
Sechel

I don't know anyone who wants to buy a GM car these days. Maybe Trump will sign an executive order to start a new government fleet or simply stock pile them. Otherwise I don't know how Trump can simply browbeat GM into building more cars than they have customers for.

I don't even think this is a U.S. problem. Was just reading about GM and Ford having trouble in China and how Toyota is bucking that trend.

ReadyKilowatt
ReadyKilowatt

That sign has got to be at least 30 years old. Can't imagine what the inside of the plant looks like. Must be one heck of a depressing place to work every day.