Howes: Trump rages against the GM machine, unsuccessfully
General Motors Co. CEO Mary Barra doesn’t work for President Donald Trump — and neither does the United Auto Workers.
Not that any of that seems to matter to America’s Tweeter-in-Chief. In a flurry of tweets beginning Saturday night, the president commanded GM to restart production at its Lordstown Assembly Plant in northeast Ohio, appeared to dismiss the legalities of the union’s existing contract with the automaker, and insisted that negotiations over the plant’s future be pulled forward from bargaining scheduled to begin in midsummer.
Embarrassment can do that. The president who urged would-be supporters in Ohio’s Mahoning Valley to hang on to their homes because manufacturing jobs are "coming back" faces more complex reality: excess plant capacity, a steadily shrinking market for traditional compact cars like the ones built at Lordstown, and typical product allocation decisions are confounding his Make-it-in-America pledge.
That’s not all. Pressure is intensifying on automakers to fatten profit margins now to fund next-generation technology for the future even as Trump tariffs are increasing costs, especially on steel and aluminum. And more tariffs could be coming on foreign-built vehicles and parts, a prospective move the industry foreign and domestic categorically opposes.
The president's honeymoon with Detroit's automakers is over — particularly with GM. The automaker's plant restructuring, delivered the Monday after Thanksgiving, is rekindling resentment over GM's taxpayer-funded bailout. It's forcing comparisons to rivals (see Fiat Chrysler Automobiles NV's plans for a second Jeep plant in Detroit) who aren't moving to close plants.
It's also proving that as much as GM's leadership has moved on from the facts of its historic bankruptcy, most of America hasn't. Nor has the president, who took office with the promise that the auto industry would for the first time in who knows how long have a friend in the highest place in the land.
But reality is souring the love affair, a drama playing out in the industrial Midwest states that delivered Trump to the presidency. GM is moving to close plants in Michigan, Ohio and Maryland. Ford Motor Co. cancelled plans to build its next-generation Focus compact in Mexico, only to move production of it to China and delete it from its U.S. lineup.
FCA killed its plan to move assembly of its Ram heavy-duty pickups to Warren from Mexico, a decision Trump at the time touted on Twitter. Plans to build a second Jeep plant on the site of its Mack Engine operations are a win for Detroit, the UAW and FCA that demonstrates the value and growth potential of a classic American brand known around the world.
The president is likely to draw more energy for his 2020 re-election bid by bashing GM's cold-hearted decision-making affecting the heartland. Few places are more critical to winning than the work-a-day counties in northeast Ohio and southeast Michigan, and hammering the likes of GM for moving to close plants could resonate with union households — up to a point.
"General Motors and the UAW are going to start 'talks' in September/October," Trump tweeted early Monday. "Why wait, start them now! I want jobs to stay in the U.S.A. and want Lordstown (Ohio), in one of the best economies in our history, opened or sold to a company who will open it up fast!
"Car companies are all coming back to the U.S. So is everyone else. We now have the best Economy in the World, the envy of all. Get that big, beautiful plant in Ohio open now. Close a plant in China or Mexico, where you invested so heavily pre-Trump, but not in the U.S.A. Bring jobs home!"
There's a process for that. It's called collective bargaining. And how and whether GM and the UAW negotiate a fresh act for Lordstown (or GM's Detroit-Hamtramck Assembly) will be governed by their mutually agreed schedule, not presidential demands pre-ordaining the politically correct outcome.
Repeated episodes of corporate decision-making to benefit the corporations and their shareholders are harsh reminders that industry does not answer to the president, that decisions made today are intended to position the companies for success years from now.
The auto industry is moving into an era of rapid, disruptive change. Sales and profits are showing signs of leveling off; changing market demand is forcing automakers to restructure their product portfolios, producing winning and losing plants; and the push deeper into electrification and self-driving vehicles threatens to radically reshape the ranks of both salaried and hourly employment.
Viewing the industry through a 30-year-old lens and making a lot of noise about it may win short-term political points, but it's not likely to change the outcome — and that's the only thing that matters.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.