Tuesday, November 27, 2018

Spinning the Tariffs on GM News

You've already heard the spin on "Orange Man Bad" tariffs vis-a-vis the GM plant closings.  The Usual Suspects are telling you that GM's profit margins are not sufficient to bear the burden of the tariffs.

Orange Man Bad, see??


...While the company has said that it believes tariffs on steel and aluminum will add about $1 billion in costs over the next year, there is little sign that the layoffs and closures are related to the tariffs. The company had around $145 billion in sales last year and costs of production of $118.7 billion, down significantly from $130.5 billion four years prior. So the overall additional costs of the tariffs is relatively small for GM....
Yes, indeed; against a manufacturing profit of $27Bn, $1Bn is not a big deal.

The Volt will be dropped because GM has a full-electric sedan available, the Bolt.  The Impala has been on the chopping block for 2 years.  Great full-sized sedan, but nobody wants to buy it at the price.  The Buick LaCrosse to hit the graveyard too.

Ford announced similar cuts in its offerings several months ago, but did not announce major cuts in personnel at that time.  The drama isn't over with yet, folks.

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