Sometimes you just have to laugh. Sometimes the only alternative to being consumed by the chaos is to give yourself just enough distance to separate the profound and important from the dumb and frivolous. This is why the Good Lord gave us irony. The car world has reached peak irony.
If this is your first time reading The Morning Dump, it’s ostensibly an automotive news roundup wherein one of us talks in a straightforward manner about which cars or executives are being recalled, what’s happening to car prices, et cetera. Occasionally, it goes a little off the rails because there’s some theme that emerges in the automotive world that’s worth talking about somewhat more obliquely.
Did you ever see the Lars Von Trier movie Melancholia? I wouldn’t exactly go out of my way to watch it, if only because the central irony of the film is almost too hard to bear. The crux of this eschatological narrative is that one sister, played by Kirsten Dunst, refuses to yield to convention and acts in a way that feels increasingly irrational. The other, played by Charlotte Gainsbourg, does her best to be reasonable and act rationally even as the world is possibly ending. The closer we get to humanity being wiped out the calmer Dunst is and the more freaked out Gainsbourg gets because it turns out that believing nothing really mattered and acting accordingly is, ironically, the only truly logical way to exist in a collapsing world. If you want a similar, but less dour version of this, you could watch Neon Genesis Evangelion, which has way better cars and cool robots.
That’s a big wind-up to a report that’s just come out indicating that BYD might not want to build a plant in Mexico because it’s afraid Mexico is going to steal its secrets. Ironic! Vice President J.D. Vance has been out claiming that pursuing cheap labor always has a cost to countries, which isn’t wrong, but is doing it at a time when the U.S. government is trying to de-invest in the development of advanced electric cars in the United States. Ironic!
Tariffs can work, and the huge Japanese investment in the US is probably the best example of this. Now President Trump is threatening to put even bigger tariffs on Japan, which is a little ironic because Japan actually has no tariffs against importing cars from the US and that seems like a fair and reciprocal tariff (which is the goal, right?).
There’s so much irony I’m going to burst at this point, but let’s toss one more on there. GM gets viewed as being behind the curve sometimes when it comes to technology, but GM is now pretty far ahead of it when it comes to electrified vans. The response? GM is maybe too far ahead.
The Irony Is Killing Me
There’s a narrative in the automotive world that the Chinese government allowed the whole world to bring in its manufacturing to China, only then to steal the competency necessary to build cars. That narrative exists because, in some part, that’s what happened. However, with electrification, it’s a little different. China pumped billions and billions of dollars into becoming a leader in electric cars and, while some of that foundational knowledge certainly came from places like Germany and the United States (and was gained via joint ventures, i.e. deals with western automakers, not always IP theft), they’ve gone ahead of Western automakers in many areas of electric car development.
BYD, like other Chinese automakers, has found a decent export market in Mexico and was planning to build a plant there. When this news got out, the American government freaked out a bit and slapped huge tariffs on Chinese-built electric cars and pushed Mexico to not make it any easier on BYD. That was back when the United States was a good trading partner with Mexico. The vibes may have shifted here a bit lately.
Now, though, it’s the Chinese government that’s worried about the plant. Why? According to a Financial Times report titled “China delays approval of BYD’s Mexico plant amid fears tech could leak to US,” China doesn’t want the United States to do to China what China did to everyone else:
“[D]omestic automakers require approval from China’s commerce ministry to manufacture overseas and it has yet to give approval, according to two people familiar with the matter.
Authorities fear Mexico would gain unrestricted access to BYD’s advanced technology and knowhow, they said, even possibly allowing US access to it. “The commerce ministry’s biggest concern is Mexico’s proximity to the US,” said one of the people.
Lol.
I will again reiterate that, when it comes to electric cars, China is the real innovator here and not the IP thief (even if the knowledge was built on stolen data), so the government’s concerns here aren’t entirely invalid.
‘Cheap Labor Is Fundamentally A Crutch’ VP Vance
Vice President JD Vance gave a speech to the American Dynamism conference yesterday that I’ve linked above, and you can watch it if you’ve got a half-hour to spare today. If you can’t, here’s a good summary via Nikkei Asia. The point of the speech appears to be to try to tie together President Trump’s industrial and immigration policies.
This part struck me:
“The idea of globalization was that rich countries would move further up the value chain while the poor countries made the simpler things,” Vance told the American Dynamism conference in Washington organized by venture capital firm Andreessen Horowitz.
He cited Apple’s iPhone, which is designed in Cupertino, California, but produced in locations such as the Chinese city of Shenzhen. Globalization assumed that if advanced economies like the U.S. lost manufacturing jobs, their workers could learn to design or learn to code and continue to prosper.
“I think we got it wrong,” Vance said. “It turns out that the geographies that do the manufacturing get awfully good at the designing of things.”
In light of the story above about BYD, this is a little funny, but I don’t think it’s entirely wrong. If you’re confounded by the large number of people who voted Bush-Obama-Obama-Trump-Biden-Trump I think you can go all the way back to the neoliberal trade policies of the Clinton Administration, China Shock, and the fact that we traded away a lot of jobs and industrial knowhow for the ability to buy cheaper crap from Walmart and, now, Amazon.
This left communities, especially in the industrial Midwest, hollowed out by plant closures and lost jobs. Where once there was a thriving middle class you’ll find poverty, drug abuse, and people looking for some kind of hope.
“Cheap labor is fundamentally a crutch, and it’s a crutch that inhibits innovation. I might even say that it’s a drug that the American firms got addicted to,” the vice president said.
Rather than investing in innovation, companies have found it more convenient simply to offshore factories to economies with cheaper labor or to import cheap labor through immigration to produce things, he said.
This is where the speech loses me a little. Cheap labor is a crutch, absolutely, and I don’t disagree that it’s a drug. That being said, the big idea here is that service jobs are somehow bad and that industrial jobs are somehow good. It’s possible, and even desirable, to let people transition from manufacturing jobs to something better.
It reminded me of something that the first Vice President, John Adams, said in a letter to his wife Abigail:
“I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain.”
Preach, brother.
That kind of moving up in the world from smelting aluminum to doing something easier that pays better requires investment and, unfortunately, the liberalization of trade didn’t come with any answer for those communities that would be losing jobs. Why? Because that requires, at some level, government intervention and, in the back-and-forth between Democratic and Republican presidents, we got the free trade part, but we didn’t get everything else that needed to come with it.
The CHIPS Act and the Inflation Reduction Act seemed designed to address some of this, hoping to stave off the threat of losing the innovation race to other countries by encouraging investment in more advanced industries here in the United States. Currently, the Trump Administration’s plan is to undo these acts, which could risk jobs and the US getting ahead in these critical areas, which is probably why even many Republicans are trying to save the programs.
On the immigration and labor question, I’ll just leave this quote I saw on the wall at Ellis Island in an exhibit there:
“Before I came to America, I thought the streets were paved in gold. When I came here I learned three things: The streets were not paved in gold, the streets weren’t paved, and that I was expected to pave them.” – unnamed Italian immigrant.
Japan Is The Biggest Foreign Investor In The United States, Will It Be Punished For It?
America has a 2.5% tariff on cars imported from Japan, but Japan has no tariff on cars imported from America. The caveat, of course, is that Japan has extremely strict homologation standards that make it difficult for American companies to sell cars there. While those barriers exist, the reality is that Japanese tastes run towards the kinds of smaller cars that America produces in such small volumes that it imports them in great numbers from Japan.
If the premise of the trade war is that we need fair and equal/reciprocal tariffs and we need to bring more jobs back to the United States, you’d think that Japan would be the one company that would get a break. Japan has been, historically, the biggest foreign investor in manufacturing in the United States. That’s not what’s happening and now Japanese automakers are trying to figure out what they’re going to do next as Automotive News reports:
At the automaker level, cutting back on output was one “theoretical” option, Katayama said. “It was mentioned as an example of what we should think about in order to protect the state of the automobile industry as a Japanese export base. It does not mean that production will be halted.”
In the meantime, JAMA wants the Japanese government to continue negotiating with U.S. trade authorities to win tariff exemptions. So far, such appeals have fallen flat, as the U.S. stands pat.
“We discussed with the ministry our response to the U.S. government, focusing on our sense of crisis as an industry,” Katayama said. “We call on the Japanese government to continue its efforts to ensure that Japan will be exempted from the application of the additional tariffs.”
This hits all Japanese automakers, but especially Subaru and Mazda, who import more than half of their cars from Japan.
Chevy BrightDrop Vans Are Piling Up In Ontario
The Chevrolet BrightDrop van might be the best electric van for sale in America right now. Electric delivery vans, also, are among the best use cases for electric vehicles given that they usually stick to small geographic areas, idle frequently, and are traditionally stored in a shared lot overnight.
So why isn’t Chevy selling a bunch of them?
From the Detroit Free Press, we get a pretty good explanation:
Sam Abuelsamid, vice president of market research at Telemetry Insights, said the extended range of BrightDrop vans far surpasses its market competitors — but so does its price tag. Before incentives, the vehicles cost about $74,000. Ford’s E-Transit van with extended battery range, for example, is $51,600 — more than $20,000 cheaper — even before applying incentives.
“There is a market for electric vans,” Abuelsamid said. “Just not at that price point.”
Hey, it’s Sam! Here’s an irony for you, while we’re on the topic. By building the best van did GM build the least popular one? Range, which is such an issue for regular car buyers, might not be a big issue for commercial buyers, who are cost-conscious and more specifically aware of how far their vehicles will actually go.
What I’m Listening To While Writing TMD
You knew it was coming. Is it ironic that Alanis Morissette wrote a song called “Ironic” that highlights a bunch of outcomes that are not, in fact, ironic?
The Big Question
What’s the most ironic moment in automotive history?
Top Photo: BYD/Happy Days
BYD and the other Chinese manufacturers just aren’t sure if Mexican investment is worth it now that there are terrifs. The Chinese stopped working on the steel finishing in Mexico too for the same reason. It probably cheaper just to import it directly then inport to Mexico finish and then export to US. They apparently have a new method that reduces cost time and energy used.
The unions and machinist have been warning for years we are loosing knowledge and not innovating. There is alot of truth to that. If you don’t have people that can look and go oh thats how that works or that’s a common failure and we can fix it like this. Or even understand materials it’s not going to go well. That’s where we are today. I’m not sure we will get back to knowledge the guys that have a clue are probably in their 60s at their youngest. You hear of some company having to get some guy that worked on the floor for decades out of retirement to fix an issue that’s the result of offshoring. If you have any doubts about that just look at the UK. They have great engineering in sheds with guys doing things. But otherwise made in UK hasn’t really instiled confidence for a long time. We are about there in the US. There are many things china does better now. They are skilled they understand many processes. Alot of people in electronics noticed this years ago as the Chinese would clone something then make it better and fix issues. Western academia is very much at fault too wrangling that monster to get the US back on track is a huge task I’m not sure anyone is up for.
You can look at Boeing to see where things went wrong as well. The 787 had problems in manufacturing the machinists spoke up and were told they didn’t know what they were taking about. The original designers of the 737 747 knew they would work just on gut instincts. Boeing built super computers for validation but those weren’t validated and were just producing garbage. Now you have engineers saying “it works on cad” or “the computer says it works” or “it works on paper” but in reality there are issues. Because they are lacking that gut instinct, and manufacturing and or material knowledge.
Mike Rowe is doing the good work to get us back. As are many unions. If can pass knowledge down and get real understanding not just “math says it will work” we can improve many things. We are at the point where the iron workers build the bridge then the engineers come in draw it up after. While I’m impressed the iron workers can do that and we need them to. We need to do better.
The US should demand that any Chinese manufacturer that wants to sell an EV in the US has to partner with a US manufacturer so that we can learn all of their secrets. I mean, this is how China kickstarted their auto industry.
Your very valid points notwithstanding, maybe the Chevy EVan’s problem is that it has a name that sounds like something made up by the whimsical brand managers in Japan.
Requiring joint ventures in order to sell cars in China WAS IP theft, full stop.
Not a tariff, exactly, but I think the biggest trade barrier for exporting cars to Japan (and the UK) is RHD. OTH, there are much cooler cars to buy/drive in those regions than pretty much anything designed here. YMMV. I met a Swedish woman who had imported a late-60s (Chrysler) Imperial. It seemed laughably impractical to me but worked for her.
Not really. There are plenty of high end LHD cars in Japan, and nearly every automaker already makes most of their cars in both configurations anyway. US excepted, because US domestic cars are barely exported period – Ford and GM have (Ford) or had (GM) overseas divisions that made cars suited to whatever the local conditions were. The biggest barrier is simply that the cars that are big sellers in Japan tend to be uniquely suited to Japan. Just like the F-150 et al is pretty unique to the US. It’s also not that large of a market, and it’s a market that other than very high end luxury cars, has a strong preference for the home teams.
The Swedes have a weird fixation with giant American barges of old. they are all over the place in Sweden. I don’t get it, but whatever floats their boat.
Good points.
Matt has some great points about China being the leader when it comes to electric cars. I can honestly say that they also have every right to be concerned about the misappropriation of trade secrets, but if they want to continue to expand their economic base and get more of their cars on the road in first world nations, they are also going to have to play ball. This goes for both sides though as the sudden increase in tariffs in general in the USA does halt much of that trade and can end up isolating us as a country.
Of course though, Mr. Musk wants these tariffs as they offer a bit of protectionism for Tesla, and to a lesser degree this might help really kickstart real electrification of the other domestic manufacturers, it doesn’t happen in a vacuum either. Without appropriate policies and incentives, the industry will continue to ride the status quo and innovation will continue to melt away as we isolate ourselves.
Honestly speaking here, China could very well easily be our #1 best ally in trade, defense and other sectors, but there seems to be a fundamentally flawed approach because our governments are not alike. Too many in power seem to fall into the trap that “democracy good, communism bad” at full face value, which in reality isn’t black and white, but many different shades of gray all around. This prevents many in our own government from considering that China could ever be an equal to the USA.
Sure, China has some odd stuff like social credits and bad things like forced labor re-education camps and whatnot, but we also have a failed war on drugs and a crazy high percentage of incarcerated individuals serving years for often times non-violent offenses, and oh, the medical system bankrupts people.
While I agree on the premise that our government is fundamentally flawed and broken that many in the Trump camp preach, and I don’t mind a heavy-handed approach to reform, what I see happening is that they are taking the axe to programs and services that are some of the most beloved. People are beginning to worry that systems like Medicare and Social Security are at risk.
What does all that mean? I really think that we can continue to improve things and make tough decisions to reform the government, but ultimately, we need to learn to be a better neighbor on the world stage, and at least during this administration, I feel like we’re regressing to that end.
Plus, we just want good cheap electric cars… and the Chinese ones are the most desirable (primarily as it relates to value for your everyday Joe American driver).
Musk doesn’t seem to get that retaliatory tariffs are very much a thing, up to and including effectively banning his cars in other countries.
I’d gather that he’s been advised of that by now.
He seems a little slow on the uptake, like his orange bitch.
lol. Vent away.
Like I said, I’m honest. BTW, I wish them both very, very dead. Preferably painfully.
Which, Like I also said in kind, is a terrible mindset.
To wish death upon a stranger is more evil than actually killing them, because you are the one thinking about murder multiple times, instead of thinking of doing something positive for the world.
I’ll never approve of that language, regardless of whom it’s directed towards.
It makes me sad that your thought process is possible. It’s not a good thing.
From what I get in our limited interactions, you are a successful man of means. To advocate for anything other than success for others… I dunno man. It’s bad, I know that much.
It’s a shame you are like that.
They want people like me and my friends dead. They are individuals wielding a system against groups. They serve nothing other than themselves and do not partake in the systems they weaponize. Wishing to excise individuals like that from society at large because they as a single person harm hundreds of thousands and kill tens of thousands seems like that person isn’t in a terrible mindset. That’s an empathetic mindset, because they’re thinking of the vulnerable people that could be saved through what is admittedly a sot of dirty action. People aren’t making guillotine memes because they’re bloodthirsty savages, they’re doing so because removal of one person who is not contributing to society in any way but actively cutting away at it means that they as a group hundreds of thousands strong can escape being harmed. Cancer cells are outright harmful just as dictatorial absolutists are outright harmful.
I know you want to be egalitarian. But egalitarianism is an ideal because it’s impossible to truly be egalitarian. You strive towards it, but sometimes circumstances require a more primitive action to not reset progress towards that egalitarian ideal or stop it forever. This isn’t a Those Who Walk Away From Omelas situation where it’s a compromise, this is an ultimatum. Excise the outright harm or suffer the society’s death one group at a time, just like cancer shuts down organs until the entire organism is dead.
Tf is this shit?
Me advocating that I don’t want to die just because someone doesn’t want to see a rich person with ego problems get hurt.
How would you die other than old age or your own hand now that is more likely than a time in the past that you lived in that you perceived as safer?
Many people are saying they’ve heard this Presidential reasoning for tariffs on Japanese cars:
“Tariffs on Japanese vehicles are necessary because they deliberately put their steering wheels on the wrong side of the car just so we can’t easily sell our cars there. It’s so unfair! That’s proof they’ve been ripping us off for decades! If they would just make that one tiny change, just move their steering wheels, I’d drop tariffs tomorrow.”
(Stay tuned for our next episode, “Chopsticks tariff, or how American utensil exports have been forked.”)
Just saw this after posting something similar. It’s been interesting to see that Honda models consistently place at the top of domestic market vehicles made with domestic parts/pieces/labor. My previous car, a VW Jetta TDI, was assembled in Mexico with an engine from Germany and a manual transmission from I don’t know where.
I maybe(?) see where the current administration is going with all this, but the on-again, off-again stuff is substantially dinging my IRA, and I may not be on this planet long enough to see how it all plays out.
There are 270 million people working in manufacturing in China. There are 350 million people in the USA, of which roughly 7 million are “unemployed”.
It isn’t only about “cheap labor”. We simply don’t have the labor available in our country to expand the economy to it’s full potential.
“We simply don’t have the labor available in our country to expand the economy to it’s full potential.”
So let’s kick out the immigrants who make up 19% of our workforce – That makes sense.
It’s fine, they are icky brown people.
Whose jobs will not be filled by US citizens who don’t want to do them.
Meat processing plants? Most fishing people I know do catch and release because they don’t want to clean/filet them.
Every guy up I saw on a roof in Texas after a hailstorm was Hispanic.
I’m no economist, but I think inflation is going to go through the hail-battered roof if everything going on now continues to its illogical conclusion.
That is EXACTLY the problem. These people do the jobs *nobody* else wants to do, at a price companies (and consumers) LOVE. And I can tell you that even offering $25/hr, my brother can’t get white folk who aren’t useless methheads/drunks to work out in the sun all day for his fence contracting business.
I think the working class is FUCKED. But my hope is things get bad enough quickly enough that just enough Republicans figure getting rid of Trump might just save their cushy jobs. It won’t take very many. But sadly, the bottom half of the class seems very into “thank you Sir, may I have another”.
Amen, brother.
I am retired. Probably enough in my 401K/now IRA, that I put a lot of money into while I was working, that I will be fine. I had one kid, and he’s launched and making more than I did.
I honestly worry about people that didn’t have the opportunities I did and don’t have the cushion I do, unless we go through 2008 again. I was too busy working then, to pay attention to my IRA then and lost way more than I want to care to think about.
I am paying a lot more attention now.
I don’t know how all this chaos is going to play out. Tariffs on/out. It just seems to be a sh!tshow.
MTV’s Jimmy the Cab Driver’s cover of Ironic is now the definitive version.
https://youtu.be/W1U29FZIZaM?si=YaRvdg3DcXEMaliq
This is a great well thought out and complete article. Great job Matt.
As someone whose job involves speccing, building and purchasing all sorts of vehicles for a large fleet, I can agree with Matt’s point about range and cost. We (and our users) are of courese very cost-conscious, though in the case of EVs we do have special funding for EV purchases (at least at the moment…as the year goes on, who knows.) We also have a commitment to fleet electrification that we’ve been following through on. But an eTransit will serve for the large majority of our van needs that work with electrification. The Brightdrop van sits more with step vans and Class 5 chassis with walk-in service bodies for our use cases and as a cost comparison. We have fewer of those, and the cost delta isn’t as large, but it’s still there.
Always happy to the see The Fonz appear in the modern age. So thank you for that.
At the end of the day, it doesn’t matter what JD Vance says, or anyone else. They could be dead-on-balls-accurate about a problem but they will never be allowed to solve it, even if genuinely inclined to do so. Why? Two Words: Corporate Funding.
Cheap labor, imported or exported, didn’t come about because some society elevated to a higher plane of existence. It was just greed. Whatever talking points to the contrary that get handed to politicians and news correspondence to lend credence to these actions may have a seed of validity but are still moot.
Keep in mind these are the same people that demonize art degrees and vilify any aspects of enlightenment as “woke” or “communist”. If people put down the remote, close out the Insta and start reading Marx or even Thomas Paine, they are all boned!
They want an America where the rich transcend beyond the antiquated ideas of “social responsibility”, “white guilt” and “empathy” while the other 99% of citizens are enlightened beyond consumerism because they have nothing.
As far as cars go, China will be the new America (Looper called it) and America will be an oversized, neoliberal Cuba.
Imma go ahead and dissagree with you on one point there, Boss.
Cuba at least tries to get heathcare to it’s citizens. And if it does arrive, it doesn’t bankrupt you.
I just meant in terms of car ownership, average vehicle age and such. We also can’t touch Cuba’s education system nor can our leaders rock a good beard.