Give them what they voted for – good and hard.
I wonder if they’ll still think that the “economy has improved” when the layoffs begin? { LOL }
I fear that many in the red states are “practical learners” – the only make the connection when they feel it from behind.
intercst
Retribution for the UAW’s failure to kiss the ring?
I did a bit of looking at what is built where, with an eye to where things could go, if the tariffs are steep enough to make moving production economic. As the big three have managed to lose large amounts of market share, there is quite a bit of excess production capacity available in the US.
The Chevy Silverado is built in Canada, US, and Mexico. If capacity is available, production could be increased in the US plants, and Canadian and Mexican production zeroed out.
The Ford Bronco Sport and Maverick are built in Mexico. When Ford introduced those models, all they did was cannibalize Escape sales. They could probably move Bronco Sport and Maverick into the Louisville plant where the Escape is built, to zero out Hermosillo, as Louisville is now running at less than half the volume it was, before the Mexican models were introduced.
Strabismus stopped production of the Ram 1500 “Classic” at Warren Truck, so there would be capacity available to move Ram 2500/3500 production from Mexico to Warren Truck. The Jeep Compass, built in Mexico, is near end of life. It is supposed to be followed by a new version, on a new platform. Strabismus’ Belvidere plant is sitting idle, which the UAW has been barking, loudly, about. Put the next gen Compass into Belvidere.
GM would be in one possible bind: all of the Chevy Equinoxes are built in Mexico. They would either need to drop the Hummer EV, and move Equinox production into Detroit, or lease the Lordstown plant back from Foxconn, for Equinox production.
There is chatter than Rivian will run out of cash by next summer. If they go toes up, that makes their plant in Normal, Illinois available.
We are talking about tens of thousands of decent paying “jobs” for blue collar USians. Make that happen, and they would probably declare TFG President for life, by acclamation.
And what would happen to the Mexicans who no longer have auto plant jobs? They would join the flow to the north. Then what?
Steve
The union President returned the favor for the current POTUS, and VP supporting their strike, a year ago. There were plenty of the rank and file, who supported TFG however.
Steve
Do those workers exist, not currently employed and living in the right place?
If GM reopened Lordstown, or Strabismus reopened Belvidere, they would not have a problem attracting people to work for UAW wages and benefits. The places in trouble would be Walmart, Mickey D’s, and all the other places the workers went, when they were laid off from the plant.
So the price of cars made in Mexico rises by $5k. How do consumers respond? Made in USA cars are sold out and plants ramp up production. Hiring more employees.
Or do made in USA producers raise prices to match and pocket the extra profits?
And investors want to know what happens to company profits overall. Plus, minus or breakeven.
This.
Oddly enough, my son learned this very fact in his Freshman Econ 101 (or whatever they call it) in college just two weeks ago. Seems like some in the incoming admin might want to retake that class. What an odd world we live in where neither major party seems to get this.
Did the Trump tariffs lower prices for American consumers? | Econofact.
Domestic producers responded by raising the prices of their own goods, which became artificially more competitive.
The U.S. International Trade Commission found that in 2021, the tariffs increased prices between 1.7% and 7.1% in the ten most affected sectors. These include apparel, car parts, furniture, and computer equipment.
My washing machine example, from three years ago: protectionist tariff on Korean washers, so prices on USian Whirlpool washers rose, a lot. Interesting quirk in the Korean washer tariff. There was one rate, up to some fixed number of machines, then the rate went even higher. When I was in Lowe’s pricing machines, three years ago. There were expensive Whirlpool products, and no Korean products in stock.
Steve
Its interesting that the price increases attributed to tariffs are far below the cost of the tariffs.
That implies that some domestic producers raised prices but many did not. That suggests they used it to increase market share and maybe found it profitable to run plants at higher rates.
Ya, domestics will still want to have the cheaper price if possible. Keep in mind that the imports were already likely cheaper for things that can be easily substituted. It would have made no sense for the domestics to increase by the same amount - effectively levelling the playing field again.
You’re joking, right? Modern CEOs want to goose margins, so they willing trade share for profits. They will scooch right up behind import prices, take the additional 20% margin, and proclaim to shareholders how smart they are. Building out a factory to compete and hiring engineers and proles, all that icky stuff, is likely to take years. Why do that when they can get a quick sugar rush and pocket the bonuses today instead of what might happen 5 years down the line when they might not even be there anymore?
That is exactly what I stated.
Many domestic producers do not make “competing” products. I have been buying appliances “Made in China” for over 20 yrs. ZERO US producers. Medea is the China mfr and they make a lot of stuff sold under other brand names.
Appliances is not a good example. GE’s Appliance Park in Louisville, KY is huge. Traffic lights in the employee parking lot. Was sold to the Chinese. Still assembled in the US from parts made in China.
Whirlpool also still assembles in the US from parts made in China. The result was a major shortage of appliances during Covid when imports were delayed.
Yes, appliances have become a global business with players from both Europe and Asia as well as the US. Are Samsung’s made in China? Electrolux? LG?