Factual and to the point.
Thought it was worth sharing:
When Trump turns to FCA -- and he will -- here's a response
Thought it was worth sharing:
When Trump turns to FCA -- and he will -- here's a response
aldo90731
It's definitely going to be interesting when Trump gets around to it. If he does. He'd be wise not to, for many of the article's stated reasons, including increasing US employment and working to make full use of US manufacturing capacity rather than expanding Mexican capacity.
I'm popping my popcorn and getting my Kool-Aid ready.
I'm popping my popcorn and getting my Kool-Aid ready.
Be interesting to see how his proposed tariffs stack up in costs versus the increased cost to build a plant and increased costs using US auto workers. One would hope that as a successful businessman, he would have already researched this - but I have doubts.
(I'm not going down the road of union vs nonunion, or thinking that US workers are paid too much, or any of that. A simple cost comparison using the agreements and costs currently in place.)
(I'm not going down the road of union vs nonunion, or thinking that US workers are paid too much, or any of that. A simple cost comparison using the agreements and costs currently in place.)
As I have said before.
Regarding the NAFTA region, and other such trade agreements. The folks that write these things are quite good at what they do. They know that political folks change, political philosophies change, and all sorts of other things change within the parties that made the agreement. When they write them, they take that into account.
One side or another cannot just throw up a tariff wall, or tear one down. One of the main reasons for such agreements to exist is to prevent such things. If the outgoing, or incoming U administrations think they can tax whomever or whatever they want, they are sorely mistaken.
There are mechanisms within the agreements to make changes, and those mechanism must be adhered to. Of course one could just ignore the agreement, but there are mechanisms to prevent that also. Everyone assumes that these trade agreements are little more than two people shaking hands saying, "OK, let's do some trading."
Also remember, Mr Trump, does business internationally. He IS aware of what I stated above, whether one thinks he is or not. So, either he is just plain stupid, or he is purposely being opaque. My belief is the latter. Twitter is the new bully bullpit. I am not one of the folks that likes this president, but I do applaud him for embracing technology. I just wish he'd improve his methodology.
Regarding the NAFTA region, and other such trade agreements. The folks that write these things are quite good at what they do. They know that political folks change, political philosophies change, and all sorts of other things change within the parties that made the agreement. When they write them, they take that into account.
One side or another cannot just throw up a tariff wall, or tear one down. One of the main reasons for such agreements to exist is to prevent such things. If the outgoing, or incoming U administrations think they can tax whomever or whatever they want, they are sorely mistaken.
There are mechanisms within the agreements to make changes, and those mechanism must be adhered to. Of course one could just ignore the agreement, but there are mechanisms to prevent that also. Everyone assumes that these trade agreements are little more than two people shaking hands saying, "OK, let's do some trading."
Also remember, Mr Trump, does business internationally. He IS aware of what I stated above, whether one thinks he is or not. So, either he is just plain stupid, or he is purposely being opaque. My belief is the latter. Twitter is the new bully bullpit. I am not one of the folks that likes this president, but I do applaud him for embracing technology. I just wish he'd improve his methodology.
I think FCA has a better potential response to a tweet. Given the (so far) failed attempt to find a partner (or other source) for the 200 (or something in its class), it seems to me that they could announce a "new" 200, to be produced on the CUSW line with the Cherokee and the other, new CUV.
The announcement could be spun. It would be about bringing car production back to the U.S., thus preserving/creating new U.S. jobs (because the 200 otherwise would come from elsewhere, if anywhere). They could totally ignore potential importation of the Neon, because the announcement of the "new" 200 would sound enticing!
And it's not like they'd need to start the actual production of the new 200 anytime soon. Any changes made could be relatively minor, if necessary, to reduce development costs. Nor would they necessarily need to produce a ton of them. Finally, 200 production could start after the plant rotation has otherwise been completed, so it wouldn't have to interfere with the staffing and engineering resources dedicated to higher priority production starts. Whether the "new" 200 would be a relatively moderate-volume, fleet filler and/or a low-volume, retail-oriented, high-value car could be defined by whatever's best for the business case financials.
But announcing it would likely be sufficient to be acceptable to the tweeter in chief...just like Ford's announcement this week. I'm guessing Ford's announcement is actually less than meets the eye. Was anyone actually asking for a hybrid Mustang? It appears that's what they are offering up in response to the Mexican Focus tweets. Last I checked, the Mustang and the Focus will remain on COMPLETELY different platitectures...
And it sure beats how GM responded. GM claimed that all Cruze sedans come from Ohio. But there's an article on GM Inside News detailing how they found new, Mexican made Cruze sedans all over the U.S., including Lordstown, OH. The article had a photo of the Mexican Monroney stickers to prove it. That's a major faceplant, once the new administration realizes GM's reply might not be totally accurate...
Thanks,
mark
The announcement could be spun. It would be about bringing car production back to the U.S., thus preserving/creating new U.S. jobs (because the 200 otherwise would come from elsewhere, if anywhere). They could totally ignore potential importation of the Neon, because the announcement of the "new" 200 would sound enticing!
And it's not like they'd need to start the actual production of the new 200 anytime soon. Any changes made could be relatively minor, if necessary, to reduce development costs. Nor would they necessarily need to produce a ton of them. Finally, 200 production could start after the plant rotation has otherwise been completed, so it wouldn't have to interfere with the staffing and engineering resources dedicated to higher priority production starts. Whether the "new" 200 would be a relatively moderate-volume, fleet filler and/or a low-volume, retail-oriented, high-value car could be defined by whatever's best for the business case financials.
But announcing it would likely be sufficient to be acceptable to the tweeter in chief...just like Ford's announcement this week. I'm guessing Ford's announcement is actually less than meets the eye. Was anyone actually asking for a hybrid Mustang? It appears that's what they are offering up in response to the Mexican Focus tweets. Last I checked, the Mustang and the Focus will remain on COMPLETELY different platitectures...
And it sure beats how GM responded. GM claimed that all Cruze sedans come from Ohio. But there's an article on GM Inside News detailing how they found new, Mexican made Cruze sedans all over the U.S., including Lordstown, OH. The article had a photo of the Mexican Monroney stickers to prove it. That's a major faceplant, once the new administration realizes GM's reply might not be totally accurate...
Thanks,
mark
Why should a company reply to tweets? Or is this the new management style, the 140 characters era?
Ford, facts and factoids.
5 january 2017 - "Focus production shift to create 200 jobs in Hermosillo, Sonora"
Focus production shift to create 200 jobs in Hermosillo, Sonora
"... The relocation of the Ford Focus production, from Michigan into the Hermosillo, Sonora plant, 200 new jobs will be created, informed Jorge Vidal, Ministry of Economy in the State.
He said that the remodeling works to get the Hermosillo plant ready for production will start this year, as the vehicle will be in the market by 2018. More than 63 Fusion y Lincoln MKZ vehicles are currently produced per hour in Hermosillo, to be sold in the North American market.
This January 10 more details about this production might be disclosed at a conference with Ford's CEO, Mark Fields. ..."
Ford, facts and factoids.
5 january 2017 - "Focus production shift to create 200 jobs in Hermosillo, Sonora"
Focus production shift to create 200 jobs in Hermosillo, Sonora
"... The relocation of the Ford Focus production, from Michigan into the Hermosillo, Sonora plant, 200 new jobs will be created, informed Jorge Vidal, Ministry of Economy in the State.
He said that the remodeling works to get the Hermosillo plant ready for production will start this year, as the vehicle will be in the market by 2018. More than 63 Fusion y Lincoln MKZ vehicles are currently produced per hour in Hermosillo, to be sold in the North American market.
This January 10 more details about this production might be disclosed at a conference with Ford's CEO, Mark Fields. ..."
All the BS about the auto jobs going overseas (or the Rio Grande) hides an ugly fact that third and forth tier suppliers in North America have this "use once and toss away" attitude towards workers. There are a number of small parts manufacturers who regularly violate discrimination laws and yet will cry the blues that they can't find skilled help. Even small manufacturers which don't discriminate use temp workers and pay a lot less than a living wage. The ones that do discriminate also use temporary agencies since it makes it easier to hide that fact. When I was an apprentice toolmaker, most of my training cost came out of the company's pocket. Today many shops have their hand out to Uncle Sam for corporate welfare, to pay for training people smart enough to be skilled in a trade, but stupid enough to accept the pay.
There is a lot of informal mentoring that occurs between older and younger workers. When companies flushed out the older employees and brought in temporary employees to replace them all that went away. This has done much damage to the American work ethic.
There is a lot of informal mentoring that occurs between older and younger workers. When companies flushed out the older employees and brought in temporary employees to replace them all that went away. This has done much damage to the American work ethic.
FCA should simply ignore his tweets. He only tweets in shock and awe in order to get scared responses.
Meh, If they are going to have to pay tariffs, they can find a way to offset them by getting leaner. The US auto industry is still a big, fat bloated pig. If they dont, they are only going to hurt themselves. If they pass the expenses along, there are other brands to buy.
The Gub'ment has had a big hand at creating the business climate of forcing the hand of automakers to move across boarders, and forcing them to get into ridiculous technologies that no one wants, its time to uncreate it. If the auto industry doesnt like it, well, they should have lobbied harder, or they need to turn around and smack the unions right in the face.
I would love to see as much manufacturing return to the US as possible with an improved business climate but they have to stay lean and reasonable in their business practices. Thats going to mean standing up to unions as well. I have very little sympathy for automakers.
The Gub'ment has had a big hand at creating the business climate of forcing the hand of automakers to move across boarders, and forcing them to get into ridiculous technologies that no one wants, its time to uncreate it. If the auto industry doesnt like it, well, they should have lobbied harder, or they need to turn around and smack the unions right in the face.
I would love to see as much manufacturing return to the US as possible with an improved business climate but they have to stay lean and reasonable in their business practices. Thats going to mean standing up to unions as well. I have very little sympathy for automakers.
You know? I don't care if there are more FCA employees in the US now than in 2009. I care that there aren't as many employees in the US/Canada as there could be.
It bothers me every time we buy something that supposedly cheaper because it's made somewhere else, cars, tires, electronics, clothing, etc. We are supporting someone else's infrastructure and not our own.
But it is what it is - and I'd prefer a Mexican built car over China, Japan or Korea at least. Still I'd have no problem with some level of tariff on any imported product to account for the tax base loss of overseas manufacturing.
It bothers me every time we buy something that supposedly cheaper because it's made somewhere else, cars, tires, electronics, clothing, etc. We are supporting someone else's infrastructure and not our own.
But it is what it is - and I'd prefer a Mexican built car over China, Japan or Korea at least. Still I'd have no problem with some level of tariff on any imported product to account for the tax base loss of overseas manufacturing.
Why always look outside, maybe decades and decades of "free corruption and bribery" of U.S. based multinationals around the world had in the end effects also in U.S.A.?
U.S.A. "Foreign Corrupt Practices Act" is dated 1977, but real application is only of the last 10 years.
Maybe someone remembers "banana republic" terms (not he cloths brand).
U.S.A. "Foreign Corrupt Practices Act" is dated 1977, but real application is only of the last 10 years.
Maybe someone remembers "banana republic" terms (not he cloths brand).
Moving on ...
The problem with trade with Mexico is their government policy of deliberately keeping wages low despite their tendency, normally, to rise.
When you buy from South Korea, they have unions that demand the wages go up as their companies profit, and as a result, the competition becomes more fair over time - and more important, perhaps, individuals in South Korea benefit from their work. Ditto nearly all of Europe. Even in China, the labor shortage has resulted in some improvements. But Mexico? Nope.
IMHO - part of keeping NAFTA alive should be the Mexican government allowing wages and working conditions to improve. There is likely leverage within the legal scope of the agreement for that.
Better to make it so nobody wants to leave, than spend billions on a wall?
The problem with trade with Mexico is their government policy of deliberately keeping wages low despite their tendency, normally, to rise.
When you buy from South Korea, they have unions that demand the wages go up as their companies profit, and as a result, the competition becomes more fair over time - and more important, perhaps, individuals in South Korea benefit from their work. Ditto nearly all of Europe. Even in China, the labor shortage has resulted in some improvements. But Mexico? Nope.
IMHO - part of keeping NAFTA alive should be the Mexican government allowing wages and working conditions to improve. There is likely leverage within the legal scope of the agreement for that.
Better to make it so nobody wants to leave, than spend billions on a wall?
.
Robert Frost -
"Good fences make good neighbors"
{ Perhaps a good wall will help make that happen }
.
+1, 300.
I must also add that when you’re behind on your payments and realize you need to gain more skills to compete, the last thing you want to do is buy a Porsche on your credit card, and then tell your boss you’re ready for a pay cut.
Those with good search abilities will know that I have disliked high deficits since before it was fashionable — though I made a brief exception in 2008-09 because there are times to be a deficit hawk and times to take emergency action.
I must also add that when you’re behind on your payments and realize you need to gain more skills to compete, the last thing you want to do is buy a Porsche on your credit card, and then tell your boss you’re ready for a pay cut.
Those with good search abilities will know that I have disliked high deficits since before it was fashionable — though I made a brief exception in 2008-09 because there are times to be a deficit hawk and times to take emergency action.
The unparalleled success of the United States between 1900 and 1960 wasn't bound by pre-existing concepts and ideologies. Having survived the Civil War, America felt free to forge its own vision of the world and find novel ways to achieve it.
But we have become too set in our ways, too comfortable, accumulated too much baggage over the decades, and fearful to try new things and move on.
The center historically defined elections because the center was were pragmatic ideas flourished by pulling from both sides. Without getting political, these days both sides of the aisle are stuck in their old ways, one side lamenting the faded power of unions and regulation, the other mindlessly reverting to illusory freedoms and the debunked dogma of trickle-down economics, leaving us in paralysis. In the absence of a common ground, the electorate wants strong leadership. That's what this past election was about.
A key hurdle today is that unless complex social, economic and political issues are distilled into simplistic sound bites, our politicians are unable to get through to an electorate absorbed with cell phones, email, Facebook, Netflix, Fox News, and the increasingly grueling chores of work and making ends meet.
Instead of continuing this self-destructive pattern of demonizing the other side, I would urge every American to step out of his/her comfort zone, overcome his/her own fears and seek to understand the "demon" on other side in search of constructive common ground, and a set of fresh, viable and pragmatic alternatives.
Unless we find common ground, the US will come to pass, just like all other world powers before it.
But we have become too set in our ways, too comfortable, accumulated too much baggage over the decades, and fearful to try new things and move on.
The center historically defined elections because the center was were pragmatic ideas flourished by pulling from both sides. Without getting political, these days both sides of the aisle are stuck in their old ways, one side lamenting the faded power of unions and regulation, the other mindlessly reverting to illusory freedoms and the debunked dogma of trickle-down economics, leaving us in paralysis. In the absence of a common ground, the electorate wants strong leadership. That's what this past election was about.
A key hurdle today is that unless complex social, economic and political issues are distilled into simplistic sound bites, our politicians are unable to get through to an electorate absorbed with cell phones, email, Facebook, Netflix, Fox News, and the increasingly grueling chores of work and making ends meet.
Instead of continuing this self-destructive pattern of demonizing the other side, I would urge every American to step out of his/her comfort zone, overcome his/her own fears and seek to understand the "demon" on other side in search of constructive common ground, and a set of fresh, viable and pragmatic alternatives.
Unless we find common ground, the US will come to pass, just like all other world powers before it.
Some would argue that this is unfolding as we speak ... that it has been in process of coming to pass for the last few decades : since roughly 1970 ... Perhaps using the term "Viet Nam Era" as a general road sign might be useful (although that has its weaknesses).
U.S. Department of Commerce - International Trade Administration publish regularly interesting short reports (few pages) summarizing markets and U.S.A. exports.
"2016 Top Markets Report Semiconductors and Related Equipment"
U.S.A. has 50% of the world market (80% export of U.S.A. production)
This one is about Korean tariffs changes.
http://trade.gov/topmarkets/pdf/Semiconductors_South_Korea.pdf
I don't know if in semiconductor machinery is for most for final electronic components production (= cut of semiconductor wafers and packaging of them to make an electronic component) or the production of the semiconductor itself.
For now China has only 4% of world semiconductors production and 90% of equipment is from three countries U.S.A., Japan and the Netherlands.
Nothing against China, but or size and internal rules they were (and are) too different.
I till have to understand who are the geniouses that thought that having a parithetic local business partner in China, and so access to main core of a production business that is the knowhow, will not result after some years in the creation of local (chinese) companies developing their technology and products.
Now we are in the second phase, after being accused of violating intellectual property rights, now after learning how to manufacture and make research and development, there is the phase of acquisition of world market shares and intellectual property through acquisition of companies around the world (main target, for now, Europe). Base intellectual property is needed since they know how to develop new products, but many are developed starting on already existing patents.
In my opinion the main problems for U.S.A. has not origin when U.S.A. pushed to allow China to enter in WTO with too few rules (China described as the new big market), but in the '70, when finance became leading factor of economy.
Why? Because economic model of infinite growth is not applicable indefinitely to a world, and so world, that is finite.
Than You have the explosion of credit to consumers (otherwise sells will not growth) and than, as U.S.A. market reached its limits, the creation of financial derivate products (paper) to have more growth.
But since there is also a limit to that, how do I assure to finance world increasing gains? Reducing costs of products (not sell price) => delocalization of production to state that are maintained artificially at "low production costs" or by fix exchange rates or by assuring that local work cost is law, local environmental laws allow emissions level of 50 years ago.
For automotive the easy "target" is Mexico since has low international power.
China, for now, I don't think will be so interested to be too exposed mediatically, so, probably, will do like japanese and open plants in U.S.A. and be in the market as parts supplier or indirectly as is for Volvo.
But don't worry there are already the new low cost countries for automotive sector production: Vietnam, Thailand, ... also South America, that are "good" since U.S.A. has no trade deficit with them, but surplus.
"2016 Top Markets Report Semiconductors and Related Equipment"
U.S.A. has 50% of the world market (80% export of U.S.A. production)
This one is about Korean tariffs changes.
http://trade.gov/topmarkets/pdf/Semiconductors_South_Korea.pdf
I don't know if in semiconductor machinery is for most for final electronic components production (= cut of semiconductor wafers and packaging of them to make an electronic component) or the production of the semiconductor itself.
For now China has only 4% of world semiconductors production and 90% of equipment is from three countries U.S.A., Japan and the Netherlands.
Nothing against China, but or size and internal rules they were (and are) too different.
I till have to understand who are the geniouses that thought that having a parithetic local business partner in China, and so access to main core of a production business that is the knowhow, will not result after some years in the creation of local (chinese) companies developing their technology and products.
Now we are in the second phase, after being accused of violating intellectual property rights, now after learning how to manufacture and make research and development, there is the phase of acquisition of world market shares and intellectual property through acquisition of companies around the world (main target, for now, Europe). Base intellectual property is needed since they know how to develop new products, but many are developed starting on already existing patents.
In my opinion the main problems for U.S.A. has not origin when U.S.A. pushed to allow China to enter in WTO with too few rules (China described as the new big market), but in the '70, when finance became leading factor of economy.
Why? Because economic model of infinite growth is not applicable indefinitely to a world, and so world, that is finite.
Than You have the explosion of credit to consumers (otherwise sells will not growth) and than, as U.S.A. market reached its limits, the creation of financial derivate products (paper) to have more growth.
But since there is also a limit to that, how do I assure to finance world increasing gains? Reducing costs of products (not sell price) => delocalization of production to state that are maintained artificially at "low production costs" or by fix exchange rates or by assuring that local work cost is law, local environmental laws allow emissions level of 50 years ago.
For automotive the easy "target" is Mexico since has low international power.
China, for now, I don't think will be so interested to be too exposed mediatically, so, probably, will do like japanese and open plants in U.S.A. and be in the market as parts supplier or indirectly as is for Volvo.
But don't worry there are already the new low cost countries for automotive sector production: Vietnam, Thailand, ... also South America, that are "good" since U.S.A. has no trade deficit with them, but surplus.
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