Trump’s crony socialism by tweet is still crony socialism. From Wolf Richter at wolfstreet.com:
Whacked by slow demand, Ford cancels plant in Mexico, shifts car production to existing plant in Mexico.
President-Elect Trump has been hounding individual businesses with his drive-by tweets, to knock them around some, get their shares to sink, and cut some “deals.” Last year, he singled out Ford, Carrier, Boeing, Lockheed Martin, Amazon, and others. Now companies have set up damage-control teams to prepare for and counter a hit of this type.
Today he singled out GM. It was automaker day. It started with a Trump drive-by tweet about threatening GM with a “big border tax” for importing its Chevy Cruze from Mexico:
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax!
But he got the facts wrong, and GM’s damage-control team instantly retorted:
General Motors manufactures the Chevrolet Cruze sedan in Lordstown, Ohio. All Chevrolet Cruze sedans sold in the U.S. are built in GM’s assembly plant in Lordstown, Ohio. GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S.
Reality is this: Demand for GM cars has been swooning, and inventories on dealer lots have been ballooning. For example, at the end of November, dealers sat on 127 days’ supply of Cruze models, more than double a healthy level, after sales had plunged 18%. In November, GM had announced the first wave of layoffs. In December, it followed up by announcing 10,000 layoffs and five plant closings [read… “Car Recession” Bites GM: Inventory Glut, Layoffs, Plant Shutdowns].