Donald Trump held a meeting with all three US car company chief executives yesterday — Mary Barra, CEO of General Motors, Mark Fields, CEO of Ford, and Sergio Marchionne, CEO of Fiat Chrysler. Prior to the meeting Trump tweeted, “I want new plants to be built here for cars sold here!” The three US car company leaders were only too happy to raise their voices in unison to praise Trump and his grand vision.
“He looks forward to hearing their ideas, on how we can work together to bring more jobs back to this industry in particular,” White House press secretary Sean Spicer said. That would be the same Sean Spicer who two days ago stood up in the White House press room and blatantly lied about the size of the crowd during the inauguration.
Trump is an environmentalist
Trump told the group, “I am to a large extent an environmentalist. I believe in it, but it’s out of control.” Trump is a man who knows a thing or two about being out of control. Today, he has announced plans to ram through both the Dakota Access pipeline and the moribund Keystone XL pipeline, proving that his brand of environmentalism is all about burning more fossil fuels and fattening the profits of oil company executives.
After the meeting with domestic car company execs, Barra told the press it was “very constructive and wide-ranging,” saying it focused on “policies that support a strong and competitive economy and auto industry,” and “that support the environment and safety and jobs creation.”
Fields was effusive in his praise. Having been slapped around by Trump because of Ford’s manufacturing plants in Mexico, Fields showed he was a quick study who knew how to sing from the Trump hymnal when required. “We’re excited about working together with the president and his administration on tax policies, on regulation, and on trade to really create a renaissance in American manufacturing,” Fields said after the meeting.
Nothing in his remarks had anything specifically to say about making automobiles. Rather, they were in response to Trump’s decision to withdraw from the Trans Pacific Partnership. “We’ve repeatedly said that the mother of all trade barriers is currency manipulation, and TPP failed in meaningfully dealing with that, and we appreciate the president’s courage to walk away from a bad trade deal,” he said. The elephant in the room is China, which has been accused of currency manipulation ever since it embraced its own version of capitalism several decades ago.
Marchionne, who is openly seeking a buyer for Chrysler, chimed in with this: “I appreciate the President’s focus on making the US a great place to do business. We look forward to working with President Trump and members of Congress to strengthen American manufacturing.”
Cutting government regulations
Trump thumped his chest about one of his favorite topics — government regulations. “We think we can cut regulations by 75 percent. Maybe more,” Trump said. “When you want to expand your plant, or when Mark wants to come in and build a big massive plant, or when Dell wants to come in and do something monstrous and special — you’re going to have your approvals really fast.”
Predictably, he made no mention of which regulations he was referring to, but one can make some informed guesses. OSHA regulations that protect workers from losing body parts in pursuit of corporate profits would be a good place to start. Minimum wage and overtime pay provisions? Who needs them? Environmental limitations on the use of toxic materials that protect workers from industrial hazards? They cost business a lot of money. Clean air and clean water requirements also cost corporations bigly.
The most important ones, of course, are any and all rules that force car makers to manufacture vehicles nobody wants to buy. That would include CAFE and tailpipe emissions standards. Get rid of them and American manufacturers would find it a lot easier to sell high profit cars and trucks that average 15 mpg or so instead of wasting precious resources on hybrid and plug-in hybrid technology. No need to plow scarce corporate cash into EV charging infrastructure. Let the good times roll.
Perhaps Barra and company can bring back the Hummer brand. Those were vehicles every red blooded American craved. Who wouldn’t want to commute in a big, rugged truck the size of an Abrams tank? Those were the days, folks, back before Democrats and tree huggers started shouting about climate change and global warming.
The curse of protectionism
Forget about melting ice sheets. Trump and his acolytes are relying on “alternate facts.” But there is more to this than just keeping the earth safe for human habitation. As Stef Schrader points out in Jalopnik, “If America wants to be ‘great,’ it needs to produce the greatest cars on earth, not cars that are just okay enough to get by within its own borders.” Gee, you mean American car companies should be concerned about selling cars in other countries? What a novel idea.
She points out that protectionism in the form of high tariffs keep good cars out and allows domestic manufacturers to build junk. Need an example? Look at the British car industry. Favored by high tariffs after World War II, it built a succession of increasingly inferior cars until it literally ceased to exist. Today, the only good parts of the British car industry are owned by foreign companies, most of them German. Go figure. What Hitler couldn’t do with his V-1 rockets, the British people did to themselves.
Schrader also has harsh words for a prior era of American protectionism. Following the 1979 oil embargo, American car companies pleaded for relief from the onslaught of well made, fuel efficient cars from Japan. What they got was a program known as “Voluntary Export Restrictions” in which Japanese manufacturers supposedly agreed to limit the number of cars coming into the US.
As a result, claims Schrader, “Instead of simply making better cars to beat the likes of Honda and Toyota at their heown game, we ended up with domestically-made crapcans like the Chevrolet Citation II and the Chrysler K-cars.” She omitted the equally dreadful Ford Pinto.
The architect of the Voluntary Export Restrictions was one Robert Lighthizer. And who has The Donald tapped to be his lead trade representative? Robert Lighthizer. It’s back to the future all over again.
One other thing to keep in mind is that limiting competition inevitably raises prices. What will all those Trump cheerleaders have to say when the price of cars increases to pay the higher wages commanded by American workers? There’s a reason why Walmart is the largest retailer in the world and it doesn’t have anything to do with domestically produced goods.
There are two thoughts applicable here. One is, those who don’t know history are doomed to repeat it. The other is, be careful what you wish for. You just might get it.