Op-Ed: GM sends some sunshine before Trump's inauguration

Posted Jan 17, 2017 by Ken Hanly
General Motors announced Tuesday just a few days before Trump's inauguration that it would invest an additional $1 billion in U.S. factories and would move some production from Mexico to the U.S.
New General Motors CEO Mary Barra photographed in Detroit
New General Motors CEO Mary Barra photographed in Detroit
Stan Honda, AFP
GM pointed out that the new investment is in addition to the $2.9 billion the company had announced it would invest last year. The timing and optics make it appear that GM is acting in response to president-elect Donald Trump's criticism of GM and other car makers for producing cars in Mexico and then importing them into the U.S. He threatened to impose a large border tax on GM cars such as the Cruze imported from Mexico. Howeve, the appended video mentions that the increased investment had actually been in the works for some time. However, it might have been in anticipation of what Trump might do.
Whatever the reason for the action it provided an opportunity for a triumphant tweet by Trump:
Follow Donald J. Trump ✔ @realDonaldTrump With all of the jobs I am bringing back into the U.S. (even before taking office), with all of the new auto plants coming back into our.....8:30 AM - 17 Jan 2017 3,354 3,354 Retweets 14,214 14,214 likes.
USA Today announced in happy headlines that GM plans to bring thousands of information technology jobs back to the USA and will create a sum total of 7,000 new U.S. jobs when these are combined with new manufacturing jobs. The article says that the move was not in response to any pressure from Trump but also said that they thought it was "good timing" to make the announcement now. It surely will put GM in the good graces of Trump.
GM spokesperson Pat Morrisey said: “All of the decisions behind today’s announcement are good business decisions and they have been in the works for some time. There’s no question there is an emphasis on job creation in the U.S. right now. This was good timing for us to share what we are doing, including our ongoing commitment and track record for U.S. investment over the last several years.”
GM did not identify the individual plants that would gain investment saying that the details would be announced during the year. Mary Barra, GM CEO, said: “As the U.S. manufacturing base increases its competitiveness, we are able to further increase our investment, resulting in more jobs for America and better results for our owners. The U.S. is our home market and we are committed to growth that is good for our employees, dealers, and suppliers and supports our continued effort to drive shareholder value.”
GM employ 56,000 hourly workers now in the U.S. this is up from the 51,000 it employed after emerging from bankruptcy in 2009. In 2015, GM announced plans to invest $8.3 billion over four years in the U.S. This will add 3,300 new jobs. At the same time, GM has also aggressively invested in Mexico. As car sales slumped it has had to lay off some employees in the US. Much Mexican production is shipped to other countries in Europe and Latin America.
Although Trump is claiming credit for the GM investments it is not clear that Trump is actually having much if any effect on investment as the GM plan was apparently long in the works. Fiat Chrysler said on January 8 that it would invest $1 billion in the U.S. to make the Jeep Wagoneer, and other Jeep products in the US. CEO, Sergio Marhionne had made reference to doing this almost a year ago.
Ford on January 3rd 2017 canceled its plans to build a new $1.6 billion plant in Mexico and at the same time said that it would invest $700 million in a plant at Flat Rock Michigan creating 700 jobs. Nevertheless it is still planning to move production of the Ford Focus from a plant in Wayne to a plant in Mexico.
Many automakers are uncertain about what Trump will do. Some of his action may result in a trade war but other policies look positive: "On the other hand, auto executives expect Trump will cut corporate taxes and could pull back on greenhouse gas and fuel economy standards that could save the automakers money. " GM may have a bit of an edge in dealing with Trump as GM CEO, Mary Barra agreed to join a panel of CEOs that will advise Trump on economic policy. Jeffrey Conrad, Honda general manager said: “The reality is, we have a president that hasn’t gone through an inauguration yet. Everything truly is speculation. We are going to look, wait and see, and we will react accordingly.”