Howes: GM drops a bomb | Michigan Radio
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Howes: GM drops a bomb

Dec 1, 2018

President Trump came into office promising to bring auto jobs home to Michigan and Ohio, and it looked like he’d be the Detroit industry’s best friend in decades.

It’s not exactly working out that way.

Credit Daniel Howes / Detroit News

General Motors’ plan to end production at four U.S. plants next year, to imperil 3,300 hourly jobs, and to cut 6,000 salaried employees elicited a fit of Twitter rage from the commander in chief.

With apologies to King Canute who believed he, alone, could command the oceans, the president is learning he, alone, can’t command the auto industry.

On day one, Trump threatened to revoke electric vehicle credits, even though he probably can’t. Then he threatened import tariffs on foreign-made cars, presumably including the Buick SUVs that GM makes in China and the sedans it mints in Canada.

On the third day, he used Twitter again to deflect blame for GM’s decision, saying his tariffs on foreign steel and aluminum aren’t the problem. “The USA is booming,” Trump wrote. “Auto companies are pouring into the U.S.”

Except they aren’t. No, BMW isn’t building a second plant down South, as he reported. It’s thinking about it, in part as a hedge against presidential brow-beating. No, tariffs don’t help a Detroit auto industry greased by foreign parts and some production. They increase cost, decrease certainty and force CEOs to make hard calls. Or none at all.

That’s the thing about policy, Mr. President. It has consequences. And as much as Trump wants to shirk responsibility for at least some of the headwinds buffeting the industry, he can’t.

This isn't what candidate Trump envisioned when he barnstormed the industrial Midwest two years ago promising the return of auto jobs. Or when he vowed that tariffs on foreign steel, aluminum, even imported cars and trucks, would restore the Arsenal of Democracy to its former glory.

Ain't working out that way. The short-term pain of tariffs is plain for all to see. The long-term gain? Not so much.

GM has its own problems, legacies of its past. Too much excess plant capacity, and too many plants building traditional cars consumers don’t want. By its own admission, GM’s cash-flow generation is too meager, and its engineering staff is not optimized for the techy tasks ahead. None of that, it should be said, is Trump’s fault.

It’s GM’s. After American taxpayers fronted billions of their dollars a decade ago to keep The General afloat, it shouldn’t be at all surprising that critics are howling about GM’s responsibility to its people, its communities and the country. And as this restructuring unspools next year, and the fates of those four plants are decided in talks with the United Auto Workers, the howling will continue.

History can’t be erased that easily. A few years back, GM CEO Mary Barra asked me when people would start believing the new GM is for real. When it can prove its mettle to manage tough times as well as this long run of good times.

That test is coming, but it hasn’t yet been passed.

Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.