Trump’s Policies Led to the GM Plant Closures
Two of the cars discontinued in the GM plant closures are the fuel economy cars the compact and high mileage Chevy Cruze, and the plug-in hybrid Chevy Volt. GM said that they are discontinuing these to concentrate on the more popular trucks and SUVs. We wrote an earlier article on this, but not as aware of the Presidents effects in bringing this about.
Update: To bring GM into line, Trump threatened to cut subsidies to their electric cars. This would fit into Trump’s anti-clean energy goals, but now he can blame it on GM, rather than take the blame himself.
Here’s what Trump did to bring this about:
As we see lately, Trump has done everything he can to discount climate science, even calling it a hoax. The fact that a lot of rural people and higher income Republicans believe Trump, his spokespeople, and all of his political appointees, and all Republican politicians, means that they can, with good conscience, go ahead and buy gas guzzlers with no guilt about the planet’s future. These are people who then can use trucks, or afford SUVs.
Trump has also fought all clean energy and all clean air policies, for which the Cruze and Volt are designed. Trump has fought the waivers that California has enjoyed and sought to continue to keep our cleaner air standards. If we lose them, a fair part of the market for the Cruze and Volt disappear.
Trump has single handedly changed the future CAFE standard goals, halting them at those of 2021, which auto makers were already set to achieve. That clearly told automakers that there was no necessary future in their most fuel efficient models. Even if Democrats win the Presidency in 2020, and they vote for new fuel efficiency goals in 2021, they have to give the industry a three year lead time to start to bring them about. So there may not be progress on this until 2024. It also takes time to negotiate a deal between the new administration and the car companies.
Other automakers may follow suit on the fuel efficient cars, or with Chevy and GM pulling out of that market, they might appreciate that they will garner their sales.
Businesses may now figure that the Reign of Trump may be short lived, and that Trump’s climate denial moves may be blocked by the courts. He certainly will no longer get Congressional support from the new Democratic House.
Trump has bragged that he, personally, intervened with Saudi Arabia to drastically lower the price of gas before the election, from $80 a barrel to $50 a barrel, or about a 38% drop. That’s about a 70 cent drop per gallon of gas. He also said that he was continuing to work to keep the price low. No financial need to buy a compact car or an electric car.
As GM themselves complain, Trump’s steel and aluminum tariffs raised the price of parts, and price rises are more crucial on the compact cars. Trump’s overall tariffs on parts that are internationally made also raises the costs.
All of these have worked to make the Cruze and Volt more expensive, less profitable, and to also drop their sales.
If the shoe fits, its not always Cinderella.
