Don’t worry, folks, President Donald Trump is here to save General Motors’ Ohio plan, just like he saved, uh, Carrier. Oh god. This isn’t going to end well, is it. All that and more in The Morning Shift for Monday, March 18, 2019.
This month saw the “unallocation” of General Motors’ Chevrolet Cruze plant in Lordstown, Ohio, a factory that had been struggling for years well before sedan sales went into the toilet. But having been around 1966, it was one of the last major employers in a region beset by the slow death of American industry. And its closure comes at a time when GM is doing well and making healthy profits, but moving jobs to foreign countries more and more. The new Chevrolet Blazer crossover will be built in Mexico, for example. Why not Ohio instead?
A lot of people wonder this, including the ostensible leader of the free world. In addition to a bunch of other healthy and normal tweets this weekend, Trump also chimed in on outsourcing and GM:
He claims Barra blames the UAW for all of this; who knows if that’s even accurate, but I’d love to have been a fly on the wall for that conversation.
Trump is right pointing out that GM is fucking up. The General basically cut jobs while the economy is good, dumping Lordstown without giving it any other opportunity, even doing so in a way that appears to be specifically designed to dodge breaking its union contract.
So it’s funny in that I didn’t exactly expect to find Trump and myself agreeing on anything today, but it’s tragic because, well, it’s Trump. No matter how much he tries to veer a business like Carrier or Ford into the light, it always follows the same formula.
Unexpected tweets, a minute where everyone freaks out and promises change, and then no meaningful action later.
Speaking of jobs, how’s Ford doing these days? Not great, unless you’re CEO Jim Hackett. As the Financial Times reports in a very direct headline: “Ford to slash thousands of jobs in Europe as CEO’s pay rises.”
Here’s the meat of the article:
Ford will cut at least 5,000 jobs in Germany and an undetermined number in the UK as part of a plan to turn round its struggling operations in Europe.
The cuts were unveiled on the same day the US carmaker announced that chief executive Jim Hackett had received a pay package worth $17.8m last year, up from $16.7m a year earlier, despite the carmaker’s profits halving during the year and a 40 per cent fall in its share price.
As ever, it’s the people working who take all of this the hardest.
Finally, some good news. Mercedes has deemed those working at its Alabama plant worthy of producing the upcoming Maybach SUV, as Automotive News reports. This is an odd one, as demand for these GLS-based luxobarges will be aimed at China, AN notes:
The Maybach GLS, with its loungelike rear cabin, is primarily aimed at China, where customers prefer to be driven, rather than steer. China accounted for more than two-thirds of Maybach sedan sales last year.
The decision to build a vehicle that will be sold in China also comes amid chronic trade tensions and tariff actions from the U.S. China briefly raised tariffs on U.S.-produced vehicles to 40 percent last year in reaction to U.S. duties on Chinese products.
But where it is manufactured comes down to cost, said Sam Fiorani, vice president with AutoForecast Solutions. A niche product does not have the volume to support production in two countries.
“It doesn’t really makes sense to tool up in China for a couple thousand Maybach SUVs, when the Alabama plant is building [more than] 50,000 units of the GLS annually,” Fiorani said.
Now that I think about it, I’m not so sure that Mercedes thinks we’re good enough to make gigantic Maybach SUVs. It might just be that it thinks German workers are too good to touch something so grossly large and ultraluxe.
The Model Y is Telsa’s most normal new car in, well, its whole history. It’s pretty much a slightly more egg-shaped Model 3. Its reception from car enthusiasts is one thing, but its reception from the market is another, as Bloomberg notes in a wire report today that this is the worst response a new Tesla debut has gotten on the stock market:
Tesla Inc. shares plunged 5 percent Friday, the worst rout for the stock following one of Chief Executive Officer Elon Musk’s parties to hype a new product or service.
The unveiling of the Model Y electric crossover was a more subdued affair than some of Musk’s past performances, and Tesla’s customer-deposit strategy rekindled concerns about the company’s cash position.
B’berg continues to point out that while Model 3 reservations were $1,000, the Y runs you $2,500, and the car isn’t expected to make it into driveways for “for at least a year and a half.”
Whatever your thoughts on an impending crisis of the economy, the government regulating that economy, or an impending robot apocalypse, there’s no reason why you can’t get it in while you still can. On that note, Lyft’s IPO is here, as the Associated Press reports:
Lyft officially kicked off the road show for its initial public offering, putting 30 million shares up for sale Monday with an anticipated price of between $62 and $68 per share.
That would raise more than $2 billion for the San Francisco ride-hailing company, which could be valued between $20 billion and $25 billion eventually.
Lyft and Uber have raced to be first with an IPO, and Lyft’s rival is expected to offer shares in the coming weeks.
Is it wrong to put money into the pockets of Lyft? Probably! But it’s fun to see how this all shakes out.
Trump is calling for you to change horses in midstream, or whatever the turn of phrase is. Do you bring jobs back to Ohio and claim it as a win? Do you call out Trump for harming the free trade economy? What’s the play?