Saturday, January 26, 2019

Tariffs? What Tariffs??

It's useful to understand 'context' as Mr. Tonelson makes clear.

About those Orange-Man-Bad tariffs, which (we are told) precede the Collapse of Automakers by only a few years.......well.......

...the $1 billion figure doesn’t exist in isolation. It needs to be compared with the total costs these companies pay to run their operations. And when that rudimentary calculation is performed, the $1 billion looks pretty unimpressive.
After all, GM’s total costs and expenses in the third quarter of 2018 (the latest data available) topped $34 billion. Its total costs for the year’s first two quarters exceeded $32 billion. (See here and here.) So if the fourth quarter winds up in that ballpark, GM’s 2018 costs will be nearly $130 billion. Which doesn’t make the $1 billion in extra metals costs look very big at all. Ford’s costs, incidentally, were running even higher than GM’s for the first nine months of 2018.  (See the quarterly earnings reports listed here.) ...
Yah, sorry about that, but the death of GM and Ford will be due to their extravagant (and silly) spending on all-electric cars, 'driverless' vehicles,  and ownership/rental/sharing gimmicks.

Oh, well.  They'll find another Orange Man Bad thing somewhere and start all over again.

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