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Transportation Politics

Automakers, Dependent on Mexico, Face a Rougher Road with Trump (reuters.com) 106

Posted by msmash from the aftermath dept.
An anonymous reader shares a Reuters report: The election of Donald Trump as U.S. president puts new pressure on automakers and other manufacturers that have become dependent on open trade with Mexico, and raises the risk they will face higher costs. Automakers could also take a hit if instability in financial markets undercuts the confidence of consumers in the United States and other major markets at a time when growth in U.S. auto sales has stalled. Investors sold off U.S. stocks and the dollar in reaction to Trump's unexpected win. Shares in Japanese automakers, which also rely on Mexico as a production hub for the U.S. market, slid as well, underperforming the benchmark Nikkei index, which fell 5 In afternoon Tokyo trade, shares in Toyota Motor Corp were down 6.5 pct, Nissan Motor Co Ltd was down 6.0 pct, while Honda Motor Co fell 7.8 pct. U.S. manufacturing groups and companies on Wednesday said they want to work with the new administration.
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Automakers, Dependent on Mexico, Face a Rougher Road with Trump More

Automakers, Dependent on Mexico, Face a Rougher Road with Trump

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  • It was bound to happen. (Score:4, Insightful)

    by BarbaraHudson ( 3785311 ) <barbara.jane.hudsonNO@SPAMicloud.com> on Wednesday November 09, 2016 @01:02PM (#53247991) Journal
    There will certainly be a rejigging of trade. It's not fair trade when it becomes a race to the bottom for workers.
    • which is why the REAL Issue is that Mexico has a pay of $3.00 PER DAY. What is needed to adjust NAFTA to make it fair and better for all, is to require Mexico to slowly bring their pay up to $3/hr or better.
      • And those Mexican companies are going to laugh and say "nahhh". US Automakers will shutter their factory doors in the US, leave an office with a desk and a lamp, and move down to Mexico. Assets will be "transferred" and then sold, but they'll raise the price and claim it's due to government interference. Be ready to pay $40000 for that subcompact 4 cylinder.

        • Re: It was bound to happen. (Score:1)

          by Anonymous Coward

          Naww I buy Toyota which is still built in the USA. Not too expensive and runs better too;)

          http://blogs.wsj.com/drivers-seat/2010/06/23/made-in-usa-a-toyota-is-most-american-car/

          • Actually, some Japanese and European car companies have moved manufacturing to the US. But not to Detroit, but to southern states like AL, SC and TN. That way, they sidestep the UAW, while getting a friendly working environment in right to work states.

            • You mean in states that are winning the race to the bottom both environmentally and in earning power for the working class, right?

      • which is why the REAL Issue is that Mexico has a pay of $3.00 PER DAY.

        Average manufacturing wages in Mexico are more than $2 per hour [tradingeconomics.com] or about $17 / day. That is low compared to America, but the cost-of-living is low in Mexico, so money goes further. The maquiladora close to the US border usually pay even more.

        What is needed to adjust NAFTA to make it fair and better for all ...

        What is really needed is for people to spend a few seconds checking their facts before posting nonsense.

        • not really. $3 / hr for manufacturing still sucks and is very low. Again, if trump is going to deal with NAFTA, they need to argue with them to bring the MINIMUM WAGE up to $3 / hr. That will bring up the manufacturing pay as well.

          • they need to argue with them to bring the MINIMUM WAGE up to $3 / hr.

            This is a dumb idea on many levels. First, America has no business micromanaging the Mexican economy. Second, it will force tens of millions of Mexican workers into the informal economy, where they will pay no taxes, have no pensions, no healthcare, no safety checks, etc. The informal economy is already a big problem in Mexico, and making it worse will lower labor standards, not improve them.

            Trump is going to get little support from Congress in his effort to "fix" NAFTA. Most Republicans are pro-busines

            • yeah, it is absolutely horrible bringing mexico's minimum wage up higher. And obviously, minimmum wages being raised will kill jobs. I mean thank god that we are still at .75 / hr because otherwise, we would have no jobs.

              In the mean time, you might want to take up some macro economic classes.

            • Re: (Score:2)

              by stdarg ( 456557 )

              First, America has no business micromanaging the Mexican economy.

              That's hardly micromanaging, come on.

              Trump is going to get little support from Congress in his effort to "fix" NAFTA.

              Considering that the only Republican senators who lost their seats were ones who distanced themselves from Trump, I wouldn't necessarily agree with that. They know something has changed in politics, at least for the time being.

              Not only that, but the Republicans reeeeeeally want to get rid of Obamacare, and now they have the chance to do that. Will they resist much if Trump says "I'll sign that repeal bill right after you sign this NAFTA bill?"

              • and yet, Trump is already backing off on his taking out ACA. In fact, lots of promises and statements that he made, he is backing off from.
                And so many thought he was not a good GOP. I think that he is shaping to be the PERFECT GOP.

                • Re: (Score:2)

                  by stdarg ( 456557 )

                  Are you suggesting that "repeal and replace" means Trump is obligated to come up with something that has absolutely nothing in common with Obamacare, or that is the exact opposite of Obamacare somehow? To me that seems silly. Obviously if there are things about Obamacare he likes, then those provisions will remain afterwards. And some stuff like making family plans last until age 26 are popular.

        • Re: (Score:2)

          by gwolf ( 26339 )

          which is why the REAL Issue is that Mexico has a pay of $3.00 PER DAY.

          Average manufacturing wages in Mexico are more than $2 per hour [tradingeconomics.com] or about $17 / day. That is low compared to America, but the cost-of-living is low in Mexico, so money goes further. The maquiladora close to the US border usually pay even more.

          Nope. No, not by a long shot.

          I am a Mexican. I work as an academician at a university, and have a quite comfortable lifestyle. I earn about US$20 a day.

          Many of my students work part-time to get through life, although the university itself is free. They usually earn between a quarter than what I do.

          Basic income (~US$3.5 a day) is not uncommon. Often, those jobs allow for extra income (say, tipping), but that's far from the norm.

    • Comment removed (Score:4, Insightful)

      by account_deleted ( 4530225 ) on Wednesday November 09, 2016 @01:23PM (#53248311)
      Comment removed based on user account deletion

      • Support of that automation requires more training, resulting in more pay. Automation is a great thing. Unfair free trade is a terrible thing. A great example of this was a small engineering group coming up with a moving ladder that tripled fruit picking. 1/3 as many people - and cheaper. Farmers shied away from it because it was simpler to hire illegal aliens.

        Trump got the religion vote because they speak the same language - figurative communication rather than literal. He also supports police and oth

        • That's some tasty Kool Aid there. If you think Trump is structurally different from Clinton - other than being less disciplined and with a rather muddied view of the world - you are in for some nasty surprises.

          As, I suspect, are we all.

          May you live in interesting times.

      • As far as the religious portion goes, I think Pence covered that for Trump.

      • Just goes to show how religious observance in the US has dwindled, even if evangelicals are still a major voting bloc and, bizarrely, were often more pro-Trump than anti-Clinton.

        Jason Levine has already noted that Mike "Let's Return to the Middle Ages!" Pence was the Christian-fundamentalist-bait in this election.

        Beyond that, many of the Christian-Fundies in the US are either single-issue voters or strongly influenced by a few issues. Among the big ones are abortion and LGBT rights. Trump claimed to be against both (who knows what he really believes; he's a con man with no clear ideological position beyond "more for me!").

      • Robots are managing fastfood outlets --bye bye Burger King kitchen help.

        Ditto for the car industry.

    • Re:It was bound to happen. (Score:5, Interesting)

      by scamper_22 ( 1073470 ) on Wednesday November 09, 2016 @02:07PM (#53248865)

      Isn't it strange that America and most Western countries have stricter trade between their own states/provinces than they do with other countries?

      If you're in the US, ponder the interstate commerce clause. Ever wonder why there is a federal minimum wage? It's because when minimum wages were being introduced, it didn't take a PHd to understand that if Alabama had no minimum wage and New York had a $5 minimum wage that a lot of jobs would go to Alabama. New York workers would actually be prevented from competing to get those jobs.

      The result is the rather common sense interstate commerce clause. If goods/services are destined for trade they are subject to be regulated by the federal government... part of it is to ensure common labor, environment standards...

      The question every western country should ask is where did this logic go when it came to international free trade. This is not a left/right issue. It is an issue of the rule of law.

      There are various resolutions to the issue.
      1. Could mandate that any goods coming in from another country must obey the US federal minimum wage.
      2. Could not sign free trade deals with countries with significantly lower labor/environmental rules.
      3. Remove minimum wage regulations in the USA, giving American workers the ability to compete on a level playing field. ...

      • Blame the economists. They provided an underlying economic theory that made such policies seem the best (safest) option from a perspective of improving a country's economy. It is based on Ricardianism and a misunderstanding of some of its limitations, specifically that in a modern world, capital has no "home country" and no desire or need to invest at home. Couple that with our psychopathic corporations (by law and charter) and you have a recipe for the hollowing out of a country's working class and subs

      • Re: (Score:2)

        by Sky Cry ( 872584 )
        4. Replace minimum wage with Universal Base Income, both ensuring quality of life for local workers and leveling the playing field regardless of laws of other countries.

    • There will certainly be a rejigging of trade. It's not fair trade when it becomes a race to the bottom for workers.

      There is no concept of 'fair' in capitalism and a race to the bottom is nothing but capitalism.

    • Trump's move will disadvantage American automakers who move manufacturing to Mexico, vs Japanese automakers who do the same. Like if GM, after laying off 2000, build their plant in Mexico and try shipping those cars back to the US, they'll face a 35% tariff. But if Toyota shuts down a plant in Japan and builds one in Mexico, they won't get hit w/ this tax, since it ostensibly only impacts companies who screw US workers to the benefit of themselves - and Mexican workers. As a result, this tariff would mak

      • Wrong. Imports from Japan would also have a tariff. Trump said that ALL trade deals are under the microscope. Ditto for Japanese imports from Mexico. BTW - Japanese and German manufacturers can just expand their current American assembly plants. Assemble enough cars in the US for export, get to skip import duties on the same value of vehicles from the other country. It's how things worked before the so-called free trade agreements. Don't you want that?
        • I support Trump, but my reading of his speeches - which I followed - was that if any company shut down its US plant, built another in Mexico and then tried exporting cars made at that plant back to the US, that's when the tariffs kick in. He said nothing about blanket tariffs on all foreign goods, which was once championed by unions, as well as protectionists. Maybe he will, but that's not what I took from his speeches

          • So you missed all those times that he said he wanted to renegotiate NAFTA and all the other trade deals? Incredible. It was a YUGE part of his campaign. It was most definitely not limited just to companies that moved production from the US, but all external production. It is meant to encourage existing manufacturers to stay, and foreign manufacturers to expand to the US. It's a damn smart move, and as someone who campaigned against free trade in Ottawa (but couldn't find a single politician who actually rea

  • No, not all automakers will take that hit (Score:5, Insightful)

    by WindBourne ( 631190 ) on Wednesday November 09, 2016 @01:11PM (#53248131) Journal
    Tesla is made in America and while they import parts, they are in the process of bringing that all in-house, or least their manufacturing to California.

    • Re: (Score:1)

      by Anonymous Coward

      they are in the process of bringing that all in-house, or least their manufacturing to California.

      They are? If that is true, it's going to make it very hard for them to make money at the current prices of their cars.

      The auto industry uses assemblies - just about everyone does - except for those very very high end super cars. It's much more efficient and cheaper to buy from a company that specializes in say suspensions than make your own. Even companies with very large volumes do this. Bosch, VDO, Delco are just some of the very large companies that do this. And some car companies are pretty much just b

    • Right on. And don't forget Elio motors, also to be made in the USA.

      I don't have the money to buy a Tesla but I will sure be snapping up an Elio when it goes on sale to the general public.

      • ROFL. Uh, yeah. After waiting more than 10 years for them to come out with their car, I think that you can safely assume that it will NOT be happening.
        As to Tesla, if you can afford a 35K BMW 300 series, then you can afford a much better car with Tesla Model 3.

    • The question is whether it's more important ot support companies that do business entirely in America, or to support someone's energy agenda and associated kickbacks. I'm fine if Tesla starts looking like a value compared to its competitors, but I have this funny feeling it's not going to go down that way.

      • $7500 does not impact a car that runs from 60-140K, so once the subsidy ends there, it is over. In addition, that same subsidy is available to Tesla competitors, but, they have not made the sales. Basically, Model S outsells its competitors and both have the same subsidies. [bizjournals.com]

        As such, I think that when M3 hits, and is a superior car to its competitors BMW 300 series, etc and at the same price point (35K), then it is obvious that Tesla will be selling as many as they can produce.

        BTW, if the GOP kills the

        • As such, I think that when M3 hits, and is a superior car to its competitors BMW 300 series, etc

          No. You cannot call the Model 3 the M3, especially in the same breath as "BMW 300 series" which by the way is never, ever called that. It's called the 3-series.

    • What if the $7,500 Federal tax credit for EVs is dropped? That's going to hurt Tesla, especially with Model 3 sales.
      • First, ppl buying 60-140K cars are not really impacted by 7500 tax break.
        Secondly, even with that same subsidy offered to the competitor cars, Tesla STILL outsells them all.
        Third, the 7500 for Tesla will run out by sept 2017 or in less than 9 months. Ppl buying the M3, KNOW this and yet, they have pre-sold 400,000 cars. The most in history EVER.
        Fourth, while 7500 DOES impact sales of $20-25K cars that sell for 35K, it does not impact a 35-40K car that sells for 35K.

  • How tone deaf must you be to announce that you're wiping out all small car production in the US and moving it all to Mexico [freep.com] at the height of a campaign that features the most vociferous anti-NAFTA candidate ever? Trump's Michigan win is smaller than the number of employed US citizens Ford is about to discard with that move. If you can think of a more effective way to get the attention of a "Reagan Democrat" please let us know, because I sure can't.

  • "Investors sold off U.S. stocks and the dollar in reaction to Trump's unexpected win."

    I'm assuming this must be foreign investors since the DJIA is up over 1% as of the time of this post.

    • Last night though Dow was way down in after hours trading. Always happens after some sort of unexpected event though. If it's gone up since then that's good.

  • There are more Trump branded posts on the front page of /. than there are Trump branded buildings...

    Trump dot

    • Not just that, there was no reason for the 'Donald Trump Wins US Presidency' to be moved back to the top - that story already has 2k+ posts, and one has to click '500 more comments' to load everything, and a really short scrollbar. They could have posted the update as a new and different story - it too would have raked up 1k posts by now
  • People were building walls (and bridges) for millenniums. They were not stupid, - our mere existence proves it.

    • Yes but the issue is more complicated than the simplistic politics. We have lots of undocumented workers showing up each day; but we ALSO have lots of undocumented workers leaving the US each day voluntarily. The net increase is much much smaller than what many politicians are implying. There have been periods of time when more undocumented workers left the US than arrived and this happened without extra enforcement. Many of these workers are taking seasonal and temp jobs and then going back to their re

  • If they had not played profit for a zero sum game with the rest of the people in the world, including Americans, then Trump would not be President and they would not be in the position they're in.

    There are lots of ways to divide up the booty an economic success which reward owners over an above workers but don't involve larceny and race to the bottom predation.

    There are lots of ways to outsource prosperity to developing nations which don't destabilize the outsourcing nation yet have the long term ef

  • perhaps they shouldn't have shut down all their USA based manufacturing plants and fired all the workers?

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