It’s Friday. It’s also St. Valentine’s Day. This is the time of year when we commemorate the beheading of a 3rd-century Italian priest by giving our loved ones heart-shaped boxes filled with crinkly paper and chocolate. What is my Morning Dump gift to you? A discussion of economics, trade, and how it relates to the broader car market.
What ultimately may have doomed Stellantis CEO Carlos Tavares was not his attitude or his vision. It was the simple fact that his company’s major American brands built a ton of vehicles that few wanted to buy at the price he was selling. For much of the last few years, the CDJR brands were saddled with huge inventory. No more!
I have to talk about the latest Trump tariff threats/promises because, well, I gotta talk about them. Specifically, we need to chat about the idea of Comparative Advantage. Sorry! As a reward, I’ve got a little anecdote about the failed Honda-Nissan merger that’s too funny to pass up.
And, finally, I couldn’t end the week without sharing a touching interview with Ford CEO Jim Farley about his cousin Chris.
Ram Isn’t At The Bottom Anymore!
When I want to know how the auto market looks there’s one chart I always go to. It’s the one above, from Cox Automotive, called the monthly Days’ Supply of Inventory by Brand chart. What it’s showing is each brand and determining how much inventory it has. Cox/vAuto does this by looking at how many cars dealers have and how quickly those cars are selling.
It’s not just as simple as: the left side of the chart is good and the right side of the chart is bad. If a brand has brisk sales but a lot of cars, it might still show a high number. If a brand’s sales are slow, but it doesn’t have a lot of cars, it might be low.
There are two big things that I want to understand when I look at this chart. First, I want to see how tight inventory is nationwide. Are there more cars than buyers? Right now the answer is a big “Yes!” In October of last year, this chart showed the nationwide supply at about 68 days. In general, a healthy number is around 60 days.
That number is currently 96 days. That’s much worse! What’s going on here? Should everyone freak out? Nah. Cox explains why this isn’t that abnormal:
December brought an optimistic end to the year, with consumer sentiment riding high and high-priced vehicles selling like hotcakes. As is common in the new year, consumers slow down; new-vehicle sales in January were down by 25% month over month. Weather disruptions and the general desire to focus on the year ahead leave more buyers on the sidelines, but sales are expected to pick up as tax refund season begins.
The other big thing I want to know is where the brands are on this list and how they’re moving. Here’s a chart from October, modified by me, showing how Stellantis was doing:
All the brands highlighted in red are Stellantis brands. This includes Ram, which was so bad it couldn’t even fit on the chart. Now compare that to the one at the top. You’ll notice that the CDJR brands are starting to get a lot closer to the average (though it helps that the average is also moving toward them). Cox also noticed this:
While these are still heavy in supply compared to the overall industry average of 96, many other brands are carrying more inventory, including Ford, Lincoln, Buick and Hyundai. Lower prices and aggressive sales work have helped bring Stellantis inventory into relatively normal levels.
The end of the LX platform also helps here because, in addition to increased sales, its replacement is only coming online slowly. That’s the other side of this that’s important to consider. If a small brand like Mini, for instance, sends a bunch of new cars to dealers it’ll jolt the numbers higher for a short period of time. If Mini stays high for the whole year, that’s a bad sign.
Let’s Talk About Comparative Advantage
Apologies in advance to anyone who has taken any basic college-level course on free trade or economics, but I’m going to do a quick hitter here on a simple principle of trade. If you’d like, you can skip straight to the comments and inform me about how I’m wrong. I don’t mind! I learn a lot from being wrong.
Specifically, I wanna talk about this guy David Ricardo. He doesn’t get quite the same attention that Adam Smith or, even, his own student J.S. Mill gets. It happens!
For many reasons, people in the late 1700s in Britain went crazy for theories of liberty, governance, and economics. They hadn’t invented The Beatles yet, so this is how they passed the time.
The concept of trade was largely based on the idea of different countries either being really good at something (making silk boxers) or having a lot of stuff (the silk necessary to make silk boxers). It made sense for the country that was good at cultivating silkworms to trade its silk to the country that was good at making silk boxers, in exchange for money or other goods.
What Ricardo wanted to know was, well, what happens if one country is good at making and growing/mining everything? Would it make sense for it to import stuff from anyone else? The answer, though not obvious, is probably “yes.” This led him to the Theory of Comparative Advantage.
Basically, you may be better at making silk boxers than other people, but if you can make something complicated like a computer, then given limited resources (like workers, for instance) then you’re better off making the thing that makes you the most money. This is the idea of opportunity cost.
I mention all of this because there are only so many people in this country who will be auto workers. It’s a hard job. We might be able to make cars better than other people, but we don’t necessarily want to when some of those people could be making Nvidia chips in Arizona, or pop albums in Los Angeles.
President Trump believes that it’s better to have more reciprocation in trade and, in particular, he hates the idea of a trade deficit. That’s why he has a new plan called the “Fair and Reciprocal Plan.”
The United States is one of the most open economies in the world, yet our trading partners keep their markets closed to our exports. This lack of reciprocity is unfair and contributes to our large and persistent annual trade deficit.
The President is good at naming things. This is a good name. There’s also some truth to what he says. There are a lot of countries that we trade with that take advantage of us in terms of tariffs on various items. For instance, Japan sends us way more cars because it’s more expensive for consumers there to buy our cars. In addition, countries like China do steal our intellectual property.
President Biden saw similar issues and, during his administration, tried to strengthen our supply chains and encourage jobs here by investing in certain industries. That was the carrot. President Trump seems a bit more interested in the stick and wants to impose equal tariffs on everything.
That is, definitely, one way to do it.
Historically, I do not agree with the CATO Institute. It is a conservative/libertarian think tank and, cards on the table, I am none of those things (well, at the rate I’m eating chocolate this week I am becoming more tank-like). Still, this post about why trade deficits aren’t necessarily bad makes a good point:
Simply, it is in everyone’s interest to get the best deal. This applies to both the buyer and the seller who voluntarily engage in an exchange where each feels he is benefiting. If American consumers and businesses end up buying more goods from foreign manufacturers than they sell to foreign consumers, resulting in a trade deficit, so what?
“American citizens and firms deal with partners all over the world,” reports Cato adjunct scholar Daniel Griswold. “There is no rational economic reason why Americans should be expected to sell exactly the same value of goods and services to people in a particular foreign nation than they buy from them.”
Trade deficits or surpluses will always occur and will vary by product and from country to country. Keep in mind, you may buy lots of things from Amazon or Whole Foods yet they never buy anything from you. That’s a huge trade deficit on your end. But it does not matter because both parties benefited. The same economic relationship exists on the international level.
One of the biggest areas this will impact is cars and, particularly, President Trump’s plan calls out the EU, though South Korea is also a big player here. From Bloomberg:
A broad levy on all imported vehicles would have sweeping impacts across the industry. The U.S. imported about 8 million new passenger cars and light trucks last year, with a total value exceeding $240 billion, according to Commerce Department data.
Decades of free trade agreements have helped make North America a hub for automotive manufacturing, with highly integrated supply chains across the continent.
It’s possible all of this is just bluster. It’s just the “art of the deal” and we’ll come to some sort of concessions that make everyone happy, or appear to make everyone happy. I don’t know.
Saying “just balance everything” is a simple idea that sounds instinctively good. But “Keep It Simple Stupid” is a smart mantra that also sounds good yet, within itself, contains an implicit judgment about the person receiving the advice.
Honda Wanted To Call The New Company ‘The Honda Corporation’
I’m starting to think that Honda never wanted this Nissan deal to actually work. While there’s a lot of reporting that indicates Nissan wasn’t exactly a realistic partner, Honda maybe didn’t do Nissan a lot of favors.
Nissan Motor executives expressed astonishment and outrage when Honda Motor proposed “Honda Corporation” as the name for the holding company under which the two automakers were to integrate operations. But Honda’s executives dismissed such concerns, noting their belief that the tie-up was not supposed to be an equal merger.
LOLOLOLOL. From a value perspective, Honda appears to have seen the ratio of Honda-to-Nissan at somewhere like 5-to-1 and Nissan, well, Nissan didn’t:
Honda tried to proceed with the negotiations based on this figure, but Nissan criticized that premise, which it believed favored Honda. According to a source close to the talks, however, Honda had never said the merger would be equal.
Give Honda credit for learning the lesson of Daimler Chrysler. If it’s not really a merger of equals, don’t pretend like it is. It never works.
My Cousin, Chris
I was at a Ford event in the Bay Area many years ago and now-CEO Jim Farley was then still somewhat new at the company, having come off a successful stint at Toyota and Scion. Someone at the event mentioned that Jim Farley was the cousin of beloved comedian Chris Farley. Once you see it you can’t not see it.
There was always an implication that they were close, but I can’t remember hearing Jim Farley address it in any detail. That’s why this interview from The Detroit News about the relationship between the two cousins, I think, hits so hard:
“Chris always got in trouble, but it was innocent,” says Jim, who said Chris had a habit of crashing family cars and blaming deer for jumping out at him in the road, even if that was never the case.
“It was very childlike, these ‘live in the moment, let’s have fun’ type-of mannerisms he had. He was always very physical, and he always loved taking over the bar, taking over the family function, taking over the airport if he could.
“He was always performing,” he says. “Always.”
It’s a great read and I don’t have anything to add other than to say: go read it.
What I’m Listening To While Writing TMD
I almost made my daughter late to school today because Aretha Franklin’s “Daydreaming” came on Apple Music as we pulled into her school. You can’t not listen to a full Aretha song when it comes on the radio so we waited together. Those are the rules.
The Big Question
Do you care about the trade deficit?
Top Photo: Stellantis
I’ve recently been frustrated to hear and read about goods in the automotive supply chain having to go across the border up to 5 times, and each time it gets a tariff. I am more than aware that the supply chain is complex, and there are a lot of parts in a car, but why can’t this less than 5 times. I know it’s probably 5 parts that do this out of thousands, but… still. I am fully ignorant to the full picture there.
That said, we need trade. The best of everything is not always in one place, nor are the raw materials for everything in one place. As such, you need to trade. I am still pretty clueless why, in the end, a deficit is bad. What am I thinking… duh, this is about Oligarchs swinging their tiny tiny tiny sacks of money at each other, while our sacks just get bigger and bigger because we are all suddenly getting stepped on.
I feel like this may have been the inspiration for at least one scene in Tommy Boy.
Not exactly. I believe reciprocal tariffs on goods are fair, but otherwise I’m against tariffs, if countries want to extract their raw resources and use them in products sold to the US while we keep ours I’d say it doesn’t sound sustainable for them, but if the end product is a Hilux Champ with a manual transmission for around $10K don’t expect me to turn that down.
I think Covid taught us the importance of domestic production of things as when world trade slowed to a standstill it was the consumer nations who were left wanting, not the producer nations.
We need to manufacture shit like our drugs in the US, our oil production should be for domestic consumption, oil is a finite resource, we need to treat it like such.
If the US keeps pissing off Denmark, the Danes might cut off the U.S. supply of Ozempic and Wegovy.
And?
Just you weight.
Florida is already sinking into the ocean, it desperately needs to make Floridians lighter
I love this interpretation, honestly your comment could just be the 2nd paragraph and it would explain more about why this is happening than what Matt wrote.
If I want to worry, I at least try to focus on balance if payments rather than balance if trade. Specifically excluding services from the calculation always seemed like a bad metric designed to push an agenda rather than track anything that matters.
The trade deficit gets a lot of attention because it’s an easy-to-digest number and, without context, it feels like having a large one means that wealth is leaving your country. But every trade deficit measured in dollars has a mirror image: a trade surplus measured in actual stuff.
What people like DT should be obsessing about instead is the inflow and outflow of wealth. Are investors pouring money into american enterprises, or are they harvesting profits and pulling back their capital? Are companies and individuals importing things with a positive value creation potential, like raw materials or parts for creating other products, or are they importing things with a negative potential, like consumables and quickly depreciating finished goods?
It’s obviously a much harder metric to try to track, but it’s still easier and more productive than trying to balance trade with, say, a desert island country with a population of 5, all of whom are employed running a seawater lithium extraction plant.
I can’t be the only one who read that for a moment as “… people like David Tracy…”
It was never a “merger” it was an acquisition.
Reminds me of an old joke. A company was formed called “DaimlerChrysler” but the “Chrysler” part was silent.
Perhaps Honda should have suggested calling the merger “Honda-Nissan”.
I’m petty sure Honda was working hard to get Nissan to go away.
Yeah I assume the Japanese govt was trying to make this happen and the Honda folks (who have had their own share of product problems lately) did everything they could to resist. Size does matter, but above a certain size it also often creates more problems than it solves.
I think the important point that gets overlooked here is that it is not the other countries that have decided and manufactured these trade agreements but the mega-corporations that are pushing the money through the various governments that they need to to get what they want.
That’s why these agreements don’t seem to benefit both countries of citizens as much as they should, the benefits are for the corporations. Tariffs and whatever other techniques that the US government has been using for trade negotiations for at least the last 40 years have been not in the working class’ favor but the corporations favor.
This is like constantly putting out fires instead of killing the dragon that’s creating them. We don’t need sanctions against other countries, we need to curb corporations destroying economies and whole countries for profit. Electing billionaires and barons of industry will never solve this
Correct take. Unfortunately it’s also correct that a struggling, weak corporation will shed workers, depressing an economy. Therefore keeping that fine balance between positive societal economic impact and an overly fed corporate class is almost impossible,
Hilarious that the Business Geniuses at Nissan completely threw away their only shot at survival over something as stupid as a name. I still don’t think they appreciate how dire their current situation actually is.
I assume (much like happened in the GM/Chrysler bailout) the Japanese govt will be the insurer of last resort, but hopefully they will replace the Nissan management.
I definitely think tariffs against countries with lower wages/environmental laws/quality of life for their general population, compared to us, make sense, China and Mexico particularly should have the playing field leveled. BUT, in moderation, slowly over time ramp things up to give everyone, workers, the industry, everybody time to adjust.
Sadly elected officials play for votes, people only notice big changes, so moderation rarely wins.
Also I’ve known about the Farley connection ever since Jim Farley joined Ford and I noticed the family resemblance, googled it and found it funny, especially considering Tommy Boy, I have to wonder if Chris got any insights from Jim on that. Really sad about a lot of talent from my generation not being taken care of properly and leaving us too soon.
Does that 8 million imported vehicles include the domestic branded vehicles manufactured outside of the US?
Yes
TBQ: Do I care about a deficit as an abstract concept? Maybe, depends on the circumstances (and the CATO institute is being way to flippant with shrugging off deficits as a generalized concept). However, you asked about the trade deficit, so I’m assuming you mean the one the US is currently running. The answer to that question is yes, quite a lot, because the current trade deficit is structured very poorly for American interests.
Quick look at the reference, the BEA’s December 2024 figures are here. Most concerning is our continual deficit with China, who is not our geopolitical ally. Annually, the deficit with China exceeds the deficit of the entire EU, and quite a lot of the trade with China comes from manufactured goods that can be made in the US, but are made in China because of laxer labor and environmental regulations. Comparative advantage is one thing, but when that advantage comes from “treat workers like shit, and the environment worse” then that to me is an argument for tariffs. There are also serious national security implications in trading higher technology with China, in that IP theft is rampant and everything electronic made in China should probably be assumed to have spyware calling back home.
The other issue is that the internal consumption of the US is what creates the demand gradient that drives something close to a third of the world’s total economic activity. Seriously, look at the data, American consumption exceeds the next 5 economies combined, all of whom are major exporters to the US. I don’t presume to lecture other countries on how they should structure their internal economies, but I also don’t think it’s unreasonable for the US to use it’s massive consumption figures as a big stick to fight for the best possible deals for it’s citizens. A lot of individual trade deals are BS and have done a lot of damage to Americans, and they should be looked at.
Ultra Banal and Obvious Comment Warning:
Our country used to be a lot of things. It’s not those things anymore. Smart being the top of things lost.
But hey, simplistic thinking usually sounds really good in principle. Life is so easy peasy when things are simple. If you make it simple enough, you can just do it and it’s done. It’s even easier when you just declare that something is going to happen because then it’s already done. Heck, I bet you could probably just say you did something and that would be even simpler because you didn’t really have to do anything but it still was done anyway because it was just as simple as saying it was done.
If you reduce any and every problem to a simple single solution, that makes every problem super simple to solve. That’s how everything works, right? All problems are just a quick, obvious, simple solution from already having been solved. I bet every single problem could be solved with a snap decision and a phone call. In fact, everything has already been fixed in the he most perfect ways already.
When all you have is a hammer, every problem looks like a nail.
You perfectly summed about what I was trying to say in thirteen simple words of axiom. Duh-me
simplification of life, art, and existence is a crime – Simone de Beauvoir
I’m all for evening out the trade deficit by sending our resources like lumber, aluminum, and potash to other nations that don’t threaten to annex us.
Forget about charging cover to the neighbour, and just start interacting with other, more friendly neighbours down the street.
As far as I’m concerned we should just close down the border today. We shouldn’t deal with countries that threaten our sovereignty.
As an American, I wouldn’t blame you!
I’m really sorry – I didn’t get you anything 🙁
So, this explains why Fords always end up parked down by the river.
Especially the transit vans. They do get towed eventually.
the problem with basing global trade on the idea that “great” countries should get to build spaceships while “lesser” countries make paperclips for the countries who get to make spaceships is that nobody who actually believes this stuff ever considered if Vietnam or Bangladesh wants to be doomed to make paperclips forever and they tend to get extremely irrational & angry if one of those “lesser” countries decides they want to make food or medicine instead
James May did a very enjoyable show called ‘The Reassembler’ (av. on YT) in which – as one might expect – he reassembles things.
My favorite episode is the one where he puts a Honda monkey bike (z50) back together. While he’s working, he talks about different topics to pass the time, and in the monkey bike episode he addresses the very idea you mentioned.
Apparently in the 1960s, Japan’s manufacturing capability was not taken seriously: they were viewed as being able to make toy-like bikes but the nice/large/fast/high-quality bikes would be made by the countries who had traditionally done so (Germany, Italy, etc.).
The lesson, as he put it, was “… not to be rude about foreigners, because they can do things as well”. It’s a good point.
The video is here, and is recommended viewing for a Friday: https://www.youtube.com/watch?v=joCG9w_3fKQ
James may makes excellent content on his own, all three of them do. Im sure in a few years there will be some sort of encore where the three of them go on an epic geriatric journey.
I would watch that.
Yeah, it’s called the Grand Tour!
James May did a 3-part series called “The People’s Car”, about the rise of what we now might call Cheap & Cheerful automobiles. It is the best automotive TV show I have ever watched — I actually learned quite a bit from it.
(And the funniest part was that he intentionally skipped over Mini, not because he doesn’t like Minis, but because “You’ve already heard that story a million times.”)
Close – it was called “Cars of the People” 🙂
There are a lot of BBC clips on YT but the full episodes appear to be purchase-only. I bought the series on Amazon Prime Video.
Cars of the People is available on BitTorrent, thought none of us would ever get it there.
Trade deficits? No, I don’t care, it’s the sum total of individual transactions between private parties, for those transactions to happen, the party on each side obviously decided it was a good deal for them, the government’s role, if anything, should be to facilitate more economic activity, including international trade
The budget deficit, on the other hand, yeah, that is a real problem. I dont support the way the administration is going about dealing with it, and also doubt it’s going to actually accomplish what they claim, but as a general concept, yes, I do agree we need to balance the budget and start reducing the national debt. A recession triggered by excessive tariffs is not going to help at all in achieving that
Trade deficits only matter if national boundaries matter.
Do national boundaries matter?
Depends on who you’re asking. For some people, a line of ink on a map is more important than anything, even the alleviation of human suffering. That line of ink is GOD.
Except budget deficits in a government with control over their monetary policy don’t matter that much either.
The US Dollar is the world’s reserve currency so there is always demand for foreign investment which means the US can easily raise as much money as they want at any time by issuing bonds.
This increases the debt, but it in no way shape or form resembles you or me getting into debt and increasing our debt load. The debt has a fixed price. $1 worth of bonds will always cost $1 to repay at redemption. The interest on that $1 will always be the interest rate that it was issued at.
Why does this matter? The US has complete control of the supply of dollars. At literally any point they could mint a coin they say is valued at, say, $36.2 Trillion (the January estimate of total federal debt), and be able to cover 100% of the outstanding obligations. This isn’t a good
idea for a whole host of reasons but it is one of the reasons that purchasing US debt is considered to be “risk free.” You are always going to get paid, because the US can just print enough money to cover the cost. Not only are you always going to get paid, our relative economic strength means you are going to get paid almost certainly without losing your shirt due to our runaway hyperinflation (which would definitely happen if we minted a $36.2t coin).
In the past when the US Dollar wasn’t the world’s reserve currency, when demand for dollars wasnt guaranteed, in order to issue bonds, you’d need to offer an interest rate high enough to entice the purchase of those bonds. This makes debt service a lot more expensive and a balanced budget a lot more important.
TLDR: The national debt effectively doesn’t matter until we are trying to issue more debt than the market wants to purchase. Since the US is the world’s reserve currency, it would take a shock, the likes of which haven’t happened since WWII, to change that status.
Yeah, I see what you’re saying BUT….this sounds a lot like the whole “housing will never go down in value” pabulum I heard in ’07 and ’08.
The dollar is the reserve currency *till it’s not. You said it yourself, too – what happens if the market doesn’t want to purchase our debt anymore? Plan for the bad times.
And when it comes to reducing the budget deficit, why do they always go after social programs and “entitlements” (first of all, I fuckin paid for it, so yes, I’m entitled to the shit I worked for.) and stuff that’s a mere fraction of the TRILLION dollars we spend on maintaining a WWII-grade military industrial complex.
Haven’t you seen what a guerilla force can do to an At-At? Pretty sure there’s a lot of “welfare” in a corporate sense, plenty of greed, corruption, and monetary sleight of hand going on with a small group of companies. But here’s a culture war, pay no attention to real issues, please.
I get the sentiment for planning for the bad times. I just think that for the bad times to be a thing, so many catastrophic things would have to happen, so suddenly, that the bad times aren’t even worth planning for.
Like, the most chill version of this story is another economy becoming strong enough to challenge the US as the locus of the global economy, which isnt it self a catastrophic outcome if it was just that the other country became stronger without the US imploding. China has deep foreign investment restrictions (which is extremely important to this particular matter), is 35% smaller than the US economy, and faces massive demographic and societal economic headwinds. Every other nation with a developed economy is 85%+ smaller than the US. It’s unlikely.
Other things that might cause this to happen would be a nasty great-power war that the US manages to lose, or utter societal collapse.
Leave it to the current inept congress and actively destructive executive to figure out how to prove me wrong, though. Most general macroeconomic theories don’t account for advanced nations repeatedly punching themselves in the face for no reason.
Yeah – the face-punching is what’s freaking me out. Lots of “they wouldn’t do that….” floating around about things that have been absolutely pledged.
When dealing with people with an interest in governing, I think your points are made well. I don’t think governing is the focus; the idea that this is a corporate restructuring fundamentally misunderstsands how societies work. Not everything is business.
Agree generally, however I think what has made the U.S. the keystone of maintaining the stability of the Marshal Plan, and hence our status as world reserve currency, is that until just recently, we were ruled by law and the constitution.
“it would take a shock, the likes of which haven’t happened since WWII, to change that status.”
Been seeing a lot of that lately.
Maybe a “shock” like the supposed bastion of democracy threatening to take over sovereign nations? Lots of language similar to what Putin used about Ukraine floating around the White House these days.
Sadly we haven’t really been ruled by law and the constitution for decades. Maybe even a century if depending upon your interpretation.
“I am not a crook” was the last tricky dick that thought “if the President does it, it’s not illegal”. Even 10yo. me was cheering that departure, which confused my parents. Can’t wait to see history repeat.
Nixon was bad, the executive branch has too much power no matter the person, and when they abuse that power nothing happens, going back as far as Grover Cleveland and his violent reaction the Pullman strikes. It took a century to get here. Maybe with decades of informed voters and a hyper focus on rooting out corruption and greed it could be reversed but I don’t see a fix happening anytime soon.
I care about deficits only insofar as they threaten national security.
Trade with allies is great and should be encouraged. Biden’s blocking of the sale of US Steel to Nippon Steel was short-sighted and stupid.
Trade with China should be discouraged. Outsourcing enough critical infrastructure and manufacturing capacity to leave us threatened in the event of a shooting war is not good. If I could trust that tariff bluster and threats were limited to helping us reshore critical manufacturing, I’d be inclined to support it. That seems pretty decidedly not to be what’s happening.
I honestly thought Nippon Steel was the best possible acquirer, they only have a couple of smallish plants in the US and were buying US Steel specifically to expand their capacity, there would have been no facility closures and basically no layoffs, the company even would have kept it’s identity, Nippon was going to fold all their existing operations here into US Steel as their North American subsidiary
Cleveland Cliffs is US Steel’s biggest direct competitor, the two have huge amounts of overlapping/duplicate operations, obviously that deal was going to mean a lot more plant closures and job losses, along with US Steel entirely ceasing to exist as a company.
Yep, a critical concern here in NW Indiana where US and Cliffs have multiple facilities in close proximity.
I worked in an engineering/maintenance role in the steel/specialty metals industry for about 20 years. I worked for one of the predecessors to Cleveland Cliffs for 7 years. I still reside in; and am from, the Pittsburgh region. I supported the Nippon merger.
It’s almost as if, and hear me out here, rent-seeking groups created the very problem they’re not freaking out about by offshoring our entire manufacturing base and discouraging careers in anything but desk work…
Was it stupid? I’m not sure it was. What was stupid is blocking the deal, and not immediately working on an investment scheme to renovate and upgrade the plants that US Steel could not afford to run as is and compete. Base metals are critical defense materials, and should be US owned. That’s not something I would normally say, either.
It does not help if it is US owned if investment is never made in making the facilities world class. After war breaks out it is too late.
I hear ya, but whose decision was it to outsource manufacturing capacity? It was the decision of American corporations. China didn’t make them do it. Is it China’s job to regulate the actions of American corporations, or America’s?
Never said it was China’s fault, just that something should be done about it. The best time was 20 years ago the second best time is right now.
Triangle (or more) trade is a thing. All parties benefit by using their strengths and overcoming others weakness. Buy raw material from X to process here and sell finished goods to Y. Sell raw material to Y and buy a finished good from somewhere else. Trade imbalances exist but usually not in the long term.
I am still convinced that we’re backing our way into neo-mercantilism only because Trump learned that he gets LOTS of attention when he says the word “tariff”, so now his courtiers and the supine media are trying to turn that pathology into a cogent-sounding trade policy framework.
We’re also going back into old-fashioned imperialism – Canada, Greenland, Panama, Gaza, I’m expecting him to sail a couple of carriers to China and demand they lease us a port city any day now
“Opium Wars: The Sequel” is gonna be lit
Having just recently re-watched Tommy Boy, I’m picturing the deer scene after reading Jim’s quote.
Hate on CATO all you want, but their economics are pretty strong in most cases (and they should stick to that side, IMO). The overly-purist Libertarian attitude tends to overlook human suffering and the fact that it drags down society as a whole, but that’s a different discussion. The foundations of modern Liberarianism mostly go back to the Austrian School of Econ and IIRC, they never said much about unlimited “survival of the fittest” or “bootstraps” or any of that. When a rising tide isn’t lifting all boats, it’s time for a re-look. Or maybe the boats that aren’t being lifted as quickly are just complaining. Both are valid approaches. All I know is a developed economy can’t keep functioning with a growing wealth and income inequality like this.
Trade deficit? To paraphrase my more Libertarian-bent professors in B School 25 years ago: “IDGAF as long as their check clears” 🙂 Oversimplified, but still makes the point that isolationism, most tariffs, and the hope for self-sufficiency (ignoring any embedded security issues) tends to make things more expensive for the whole world.
It’s counterintuitive to most folks, positively perverse to zero-sum thinkers, and anathema to the rent-seekers who make up the core of the modern GOP. Doesn’t help that trade policy and foreign policy are where words like [neo-]liberal suddenly have very different meanings than common American political usage.
Carpool rules to live by: never get out of the car when The Queen is on. Your daughter is very lucky.
One – poor MINI. Why are they still a thing? HOW are they still a thing?
Two – Screw you Toyota and your lean consumer model.
I feel Mini needs another truck, like back in the day. A trucklet for the masses to battle the Maverick.
Maybe they should have kept going with the manual? They had a high take rate iirc (went away for a year or two due to supply issues, back for a year or two, then killed off, so have to go to pre covid times for reliable sales numbers) and seems would be a part of their identity. At this point they are a boutique cheap/chic bmw? Im sure there are those that want that, but how many?
I was skeptical of Mini until my wife bought one. It is a compelling product to drive, cheerful and fun. They are fun and interesting to look at as well IMO. Is it frustrating to work on? Yes, but we’ve had no major issues with ours and she did seriously consider a newer one for a moment, but we need a slightly more practical car.