1/4/2017
By Charles Payne, CEO & Principal Analyst

Donald Trump set the tone for 2017, and it’s still his in-your-face Twitter diplomacy that provides instant heat for intended targets. Yesterday, it was General Motors with a threat to retaliate if the company imports Chevy Cruze cars into the United States from Mexico. General Motors quickly released a statement saying that Cruze sedans are made in Lordstown, Ohio.  It’s only a few hatchback versions made in Mexico that make their way to the U.S. market.

The fact of the matter is that the demand for small compact cars, in general, are down considerably and margins are nowhere near pickup trucks and sports utility vehicles.  In only the second year of its current version, the Cruze saw its sales tumble 20%, prompting GM to announce 1,250 job furloughs to begin on January 23. GM also plans to idle 850 workers at the Lansing, Michigan plant that makes the Camaro and other models.

I suspect that from a political point of view, President-elect Trump is hoping to get GM to reverse its decision on the Lordstown furloughs before his inauguration. That would be yet another major victory for Mr. Trump, but then comes the harder part beyond saving jobs, to actually saving industries and bringing jobs back.

Charles Payne
Wall Street Strategies

Add a Comment!