Trump eases environmental rules to bring back autoworkers jobs

[voyager]

President Trump told executives from the country’s largest automakers Tuesday that he would ease environmental rules and other regulations to encourage the return of manufacturing jobs to the United States, a pledge that some analysts question will be as effective as promised.

Trump tells leaders of U.S. automotive industry he’ll ease rules to bring back jobs

Call that counterproductive. The EPA turned out to be a cash cow, collecting billions in fines from Volkswagen, en likely from FCA too. Trump's stance may help initially... How calculated can a company like GM be to collect government funding to stay afloat, then proudly announce that Buicks that are coming to the U.S. will be made in China? What does that say? Americans are good enough to purchase GM cars, not fabricate them? How are the unemployed going to pay for them?

However, it doesn't do anything about the fact that Detroit is not competitive on export markets. The Germans are right that this is why you barely see any 'Made in America' cars in Germany, and plenty vice versa. As a matter of fact, protectionism might even add to the non-competitiveness of American car makers, that are not at the forefront already when it comes to green technology, styling, fit & finish and branding.

"Buy American" sounds good, but it may come down to Americans buying substandard, gas guzzling cars (since Trump thinks that Climate Change is bogus), that nobody wants in the rest of the world. Irony is that the one U.S. car maker that is successful on export markets, Tesla, may be forced to go elsewhere.

 

[jbcarioca]

...
Call that counterproductive. The EPA turned out to be a cash cow, collecting billions in fines from Volkswagen, en likely from FCA too. Trump's stance may help initially... How calculated can a company like GM be to collect government funding to stay afloat, then proudly announce that Buicks that are coming to the U.S. will be made in China? What does that say? Americans are good enough to purchase GM cars, not fabricate them? How are the unemployed going to pay for them?

However, it doesn't do anything about the fact that Detroit is not competitive on export markets. The Germans are right that this is why you barely see any 'Made in America' cars in Germany, and plenty vice versa. As a matter of fact, protectionism might even add to the non-competitiveness of American car makers, that are not at the forefront already when it comes to green technology, styling, fit & finish and branding.

"Buy American" sounds good, but it may come down to Americans buying substandard, gas guzzling cars (since Trump thinks that Climate Change is bogus), that nobody wants in the rest of the world. Irony is that the one U.S. car maker that is successful on export markets, Tesla, may be forced to go elsewhere.

This is not entirely accurate. The auto markets are global, as is auto manufacturing. GM is competitive in Germany (Opel- 5th), UK (Vauxhall-2nd, Ford -1st), Australia (Holden-4th, Ford 5th), Brazil (2nd) and Mexico (2nd) (Chevrolet), China (Buick, Chevrolet).
Best-selling New Cars in November 2016 | ChinaAutoWeb
Best-selling New Cars in November 2016 | ChinaAutoWeb
2016 (Q1) Britain: Best-Selling Car Brands and Models
2016 (Q1) Britain: Best-Selling Car Brands and Models
2016 (Q1) Britain: Best-Selling Car Brands and Models
Light vehicle sales in Mexico by manufacturer 2015| Statistic

The basic problem is that, just as Donald Trump thought GM was unsuccessful in Germany because he saw no Chevrolets, most people cannot distinguish between a brand name and national origin.

BMW manufactures four models only in the US that they export worldwide.
Plant Spartanburg Vehicle Models | BMW US Factory

The discussion about "...Americans buying substandard, gas guzzling cars..." is out of date. Notwithstanding the histrionics of the US President, the US industry is global and healthy. Were this discussion to be worthwhile and relavant to us on TMC we would be discussing US content, but that is a bit-complex for simplistic jargon. Anyway, Tesla has about 95% US content, far and away the highest of any US manufacturer. US-branded vehicles globally do have significant US content, as do many Toyota, Nissan and others.

The world is far too interconnected to long endure simplistic arguments on either side of manufacturing debates, for anything. We have come to a very dangerous point for global economic health.

It's good we're not discussing aerospace, specifically space. The Boeing/Lockheed martin JC (ULA) used a Russian engine, the RD-180 for the Atlas 5.
AIRSHOW-Lockheed says rocket launch venture urgently needs U.S. law waiver
Of course SpaceX and Blue Horizon are both all-American.

So, please do not make broad unjustified generalizations. There are enough problems without overstating the issues.

 

[hockeythug]

Can a moderator change the thread title? It is not accurate.

 

[voyager]

This is not entirely accurate. The auto markets are global, as is auto manufacturing. GM is competitive in Germany (Opel- 5th), UK (Vauxhall-2nd, Ford -1st), Australia (Holden-4th, Ford 5th), Brazil (2nd) and Mexico (2nd) (Chevrolet), China (Buick, Chevrolet).
So, please do not make broad unjustified generalizations. There are enough problems without overstating the issues.

The comparison is between car exports, since Trump's concern is to keep autoworkers jobs in the U.S. So, cars that Germany makes and exports to the U.S. versus the cars that the U.S. is making and exports to Germany. There's a considerable imbalance between those, particularly since Germany dominates the juiciest segment of the U.S. car market: luxury cars. Ford Europe is another matter. Ditto Opel, which is a GM subsidiary.

 

[kort677]

The comparison is between car exports, since Trump's concern is to keep autoworkers jobs in the U.S. So, cars that Germany makes and exports to the U.S. versus the cars that the U.S. is making and exports to Germany. There's a considerable imbalance between those, particularly since Germany dominates the juiciest segment of the U.S. car market: luxury cars. Ford Europe is another matter. Ditto Opel, which is a GM subsidiary.

the germans dominate that sector because they produce a better product. the US auto makers have been churning out bad cars for decades. the japanese stole the lower and middle markets and the germans did the same with the higher end segment. no amount of jawboning will help the US automakers, only building better cars will save them.

 

[jbcarioca]

The comparison is between car exports, since Trump's concern is to keep autoworkers jobs in the U.S. So, cars that Germany makes and exports to the U.S. versus the cars that the U.S. is making and exports to Germany. There's a considerable imbalance between those, particularly since Germany dominates the juiciest segment of the U.S. car market: luxury cars. Ford Europe is another matter. Ditto Opel, which is a GM subsidiary.

Sure, but there is the balance of total automotive trade between the two countries. I do not have all that data close at hand. I do know it is not quite that simple, although the German-US automotive industry trade may well favor Germany. I do not have the data to know that for sure.
By way of comparison with one I do know, there are some Airbus models that have greater US content than some Boeing models. That depends on choices of avionics, engines, environmental systems and much more, not to mention the destination of the delivery.
So it is with motor vehicles. I am not willing to speculate that the US has a net disadvantage in auto industry BOP without examining the data. I have tried 'shooting from the hip' on such issues and have been embarrassed by facts. I prefer to have the facts prior to reaching a conclusion based on superficial evidence.

FWIW, I do have enough data to say that BMW is a net-positive for US balance of payments purposes.
In percentage terms Tesla must be the single greatest contribution to US BOP because it's US content is so much higher than anybody else.

 

[jbcarioca]

the germans dominate that sector because they produce a better product. the US auto makers have been churning out bad cars for decades. the japanese stole the lower and middle markets and the germans did the same with the higher end segment. no amount of jawboning will help the US automakers, only building better cars will save them.

That is true, even when Mercedes-Benz models are produced in Brazil and exported worldwide or BMW produced in the US and exported worldwide. The industry has become global, and US manufacturers have generally produced 'better' vehicles outside the US than inside because the markets demand has forced them to. OTOH, when looking at US-oriented vehicles produced by non_US builders for the US market one can see that the overall efficiency and 'quality' tends to be lowered to suit the US market. Bluntly the NA motor vehicle market is skewed strongly to big, inefficient and crude. Many other world markets are not.
It's a trifle disingenuous to say "..only building better cars will save them." They have proven they can and do produce high quality vehicles, but when price and big size are dominant, other attributes suffer.

Possibly arguing against my own point is the following. Several Jeep models are built in Austria. They look just like the famously unreliable US models. The Austrian-buolt models are exported widely. I knwo several people who own them. The ones they have have minimal issues. Three of my associates were so pleased with their Austrian-made Jeeps that they bought exactly the same thing for their US homes. The US ones have been, to quote a famous person, "disasters". I do not think that mens Austrians build better than US citizens. I do think the US plant has not been renovated materially for decades. The best workers cannot do good work with bad facilities.

So, I do agree with the new US President that US infrastructure is "a disaster".

 

[Haxster]

So, why not also get rid of all those expensive mandated safety features, pollution controls, certifications, and fuel efficiency regulations? These could let US manufactures dramatically reduce their manufacturing costs.

And with cheap fossil energy from fracking, new pipelines, liberated Iraqi oil, and renewed dirty coal production, lower fuel costs can offset the next generation of gross-polluting, low-MPG SUVs and pick-ups.

P.S. I hope the pinheads in Washington don't read this and get more misguided ideas.

 

[voyager]

Does anyone have information on how big a percentage of (U.S. made) Teslas are being exported?
Versus how big a percentage Detroit is exporting?

That ought to say something to Trump...

 

[jbcarioca]

Does anyone have information on how big a percentage of (U.S. made) Teslas are being exported?
Versus how big a percentage Detroit is exporting?

That ought to say something to Trump...

Thi is on topic but not exactly what you want. Tesla is mentioned but not calculated. If it had been the Tesla Model S and Model X would have been #1 and #2 because they both have >85% US content, the highest of any vehicles assembled in the US.
Export numbers are another issue. To be accurate and precise we'd need to calculate US content exported, and balance for US sold non-US content. The data are complex and sometimes ambiguous. I cannot find public data yet, but I'm looking.
Perhaps somebody else knows where to find it. Bizarrely NAFTA data differs from US-domestic data because NAFTA definitions count as NAFTA production of parts assembled from non-NAFTA components so long as the NAFTA content is:
NAFTA - Chapter 4, Part 1
Now that you've read that simple document it becomes evident that non-NAFTA content can be about 40% and still qualify as 100% NAFTA.
GM is a past master at this arcane art so has three vehicles on the cars.com American-made index taht actually have a good deal on non-US, non-NAFTA contet, structured to meet US-made defintions:
The 2016 Cars.com American-Made Index
Nobody quite matches Toyota, the most American of major auto manufacturers.
U.S. Car Exports Top 2 Million
Here are some 2015 Tesla inferred export numbers:
http://www.datamyne.com/multisite/w...amyne-Tracking-Tesla-Model-S-Exports-2015.pdf
These data are not totally perfect but they're very close. The 2016 data will soon appear and I suspect it will again be 1/3 exports. That suggests Tesla 2016 net exports of US content were around $1,750 million. That assumes mean sale price was US$75,000.
However the calculation Tesla exports are beginning to be good pulicity, and projections following Model 3, Powerwall and Powerpack will be Yuuge!!

 

[McRat]

Thi is on topic but not exactly what you want. Tesla is mentioned but not calculated. If it had been the Tesla Model S and Model X would have been #1 and #2 because they both have >85% US content, the highest of any vehicles assembled in the US.
Export numbers are another issue. To be accurate and precise we'd need to calculate US content exported, and balance for US sold non-US content. The data are complex and sometimes ambiguous. I cannot find public data yet, but I'm looking.
Perhaps somebody else knows where to find it. Bizarrely NAFTA data differs from US-domestic data because NAFTA definitions count as NAFTA production of parts assembled from non-NAFTA components so long as the NAFTA content is:
NAFTA - Chapter 4, Part 1
Now that you've read that simple document it becomes evident that non-NAFTA content can be about 40% and still qualify as 100% NAFTA.
GM is a past master at this arcane art so has three vehicles on the cars.com American-made index taht actually have a good deal on non-US, non-NAFTA contet, structured to meet US-made defintions:
The 2016 Cars.com American-Made Index
Nobody quite matches Toyota, the most American of major auto manufacturers.
U.S. Car Exports Top 2 Million
Here are some 2015 Tesla inferred export numbers:
http://www.datamyne.com/multisite/w...amyne-Tracking-Tesla-Model-S-Exports-2015.pdf
These data are not totally perfect but they're very close. The 2016 data will soon appear and I suspect it will again be 1/3 exports. That suggests Tesla 2016 net exports of US content were around $1,750 million. That assumes mean sale price was US$75,000.
However the calculation Tesla exports are beginning to be good pulicity, and projections following Model 3, Powerwall and Powerpack will be Yuuge!!

Why does this say 50%?


Back to reality.

General Motors employees 2.6 times as many US workers as the #1 US automaker, Toyota.
Ford employs over twice as many US workers as Toyota.

Now think about this. Really think.

How could Toyota be both the biggest US car company, with the most US content, but with virtually no staff? 30,000?

Because it's not true. Toyota was instrumental in establishing the US content rules. If you are going to play blackjack always be the house.

Toyota has more pull in US politics than most domestic companies. The politicos get rich in the process, so what's the harm? Will things change? Guess we will see. There is a HUGE push to keep the status quo going. Fat cat politicos do not like it when their ticket to the Gravy Train has been cancelled due to weather.

 

[jbcarioca]

Why does this say 50%?
View attachment 212112

...
How could Toyota be both the biggest US car company, with the most US content, but with virtually no staff? 30,000?

Because it's not true.

..

I suppose we must simply compare reality with reality. Both Ford and GM in the US are more vertically integrated than is Toyota. Both GM and Ford have fairly substantial overhang of employees still dating from the times when they imagined everything would always be rosy., so they have lower automation levels and less supplier integration than do later arrivals.

Toyota built new factories with their Deming-inspired JIT methodology so have more automation, fewer employees and less vertical integration than do Ford and GM.

Were you to have compared Toyota with Tesla we'd have more to discuss.

Toyota US content is not a lie. They buy US domestically-produced-parts and have substantial Tier One supplier integration, with their factories adjacent to Toyota or, in some cases, within Toyota facilities. They've mostly bought from preexisting vendors who've built facilities just to supply Toyota. GM is learning; their recent Bolt deal with LG was pretty classic kairetsu-style. We'll see how it works out, but so far it seems likely to be a wise move.

All that is in several ways similar to the Tesla-Panasonic relationship.

Please don't suggest the bias favors Toyota just because they've been relentless process improvers. GM and Ford could have done that. At least Ford did not bankrupt itself at US Government expense.

Moral: if ever a business imagines they are superior they're headed for decline. Hubris is often fatal.

 

[McRat]

I suppose we must simply compare reality with reality. Both Ford and GM in the US are more vertically integrated than is Toyota. Both GM and Ford have fairly substantial overhang of employees still dating from the times when they imagined everything would always be rosy., so they have lower automation levels and less supplier integration than do later arrivals.

Toyota built new factories with their Deming-inspired JIT methodology so have more automation, fewer employees and less vertical integration than do Ford and GM.

Were you to have compared Toyota with Tesla we'd have more to discuss.

Toyota US content is not a lie. They buy US domestically-produced-parts and have substantial Tier One supplier integration, with their factories adjacent to Toyota or, in some cases, within Toyota facilities. They've mostly bought from preexisting vendors who've built facilities just to supply Toyota. GM is learning; their recent Bolt deal with LG was pretty classic kairetsu-style. We'll see how it works out, but so far it seems likely to be a wise move.

All that is in several ways similar to the Tesla-Panasonic relationship.

Please don't suggest the bias favors Toyota just because they've been relentless process improvers. GM and Ford could have done that. At least Ford did not bankrupt itself at US Government expense.

Moral: if ever a business imagines they are superior they're headed for decline. Hubris is often fatal.

Globally, Toyota makes 29 cars per employee year. General Motors 50.

GM started the auto industry on robotic technology in the '60's.

They are highly automated.

 

[jbcarioca]

Globally, Toyota makes 29 cars per employee year. General Motors 50.

GM started the auto industry on robotic technology in the '60's.

They are highly automated.

Indeed in 1951 George Devol did sell the first industrial robot to Fisher Guide in Ewing, NJ where it handled nasty welding tasks.
That has little to do with 2017.
The global counts you quote are inconsistent with numbers I have seen. The biggest divergences I have seen come from counting affiliate/licensee vehicles produced in that number, but not counting the employees. Thus CAIC by itself makes GM look really great by that metric. and so it goes...

For such a debate to work we must agree on metrics, definitions and sources. Thus we might avoid 'alternative facts'.