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PG

Maybe Twitter politics works?

I see that Trump was berating GM on Twitter about importing cars (tax free) from Mexico for the US market.

Well today on the news it said that Ford has cancelled a new factory in Mexico and would instead invest the money in Michigan, creating new jobs there.

Maybe naming and shaming multi-nationals works after all?
PhilD

Well it won't have been a direct reaction to the tweet, but Ford has been under attack from Trump for a while over its Mexican factory plans. Hitler built some pretty decent roads as well... (3,2,1 Go Bob)
Frank Bullitt

The Chevy they import is a Cruz hatchback with the (substantially more popular) saloon built in the US, simply the Mexican plant builds hatchbacks (I wonder if any Cruz saloons are exported from the US to Mexico?)

Is ford's decision related? Not sure, I guess at the moment it's safest to work out what Trump is really capable of first.
Twelfth Monkey

Michael Moore's been banging the drum about how big auto abandoned the US, in particular Flint in Michigan, for twenty years or so.  Maybe they'll only listen to one of their own...
gooner

I thought Trump threatened GM with a massive import tax on cars built in Mexico? It would be easy to criticise his nationalist attitude if the French hadn't been doing the same for years and I don't think American automotive factory workers will be complaining!
Tim

Is this the same Donald Trump whose company has bought and invested in overseas locations, especially Scotland?

I suppose hypocrisy doesn't matter in politics.
Twelfth Monkey

It does.  It's the very bedrock.
JohnC

He promised he would bring the jobs back home before the election so I suppose this is the beginning of it. I have nothing against keeping your home production strong: we have lost far too much to the whims of foreign investors.

I spent a few days in St Andrews at New Year and from the number of American accents I heard and the number of golfing groups I saw, the weak pound is at least doing some good.

By building up the industrial base in USA though, Trump will provide a much more stable platform for the US economy than relying on the vagaries of the foreign exchange markets as we are doing at the moment.
Tim

JohnC wrote:

By building up the industrial base in USA though, Trump will provide a much more stable platform for the US economy than relying on the vagaries of the foreign exchange markets as we are doing at the moment.


Sure but I bet a lot of the people who voted for him will become dissatisfied at products that were made cheaply overseas suddenly costing a lot more when they're manufactured back 'onshore'.
Bob Sacamano

Tim wrote:
JohnC wrote:

By building up the industrial base in USA though, Trump will provide a much more stable platform for the US economy than relying on the vagaries of the foreign exchange markets as we are doing at the moment.


Sure but I bet a lot of the people who voted for him will become dissatisfied at products that were made cheaply overseas suddenly costing a lot more when they're manufactured back 'onshore'.


Will they though? Productivity and competitiveness in US manufacturing is kept high through automation and lower costs (no or low minimum wages, cheap energy, only 10 paid holidays a year etc).
As manufacturing costs rise in China a significant number of companies were already looking to bring production back to the US. Trump may just be in the right place at the right time to benefit politically from this.
Tim

I thought the next move from China was to India?

I'm not sure what I said will actually happen but around the election I saw it mentioned a couple of times when people from the 'rust belt' were getting interviewed.

I doubt the prices will rise a huge amount but knowing what people are like if something they are used to paying $15 for suddenly rises to $20 they'll be quick to whinge about it, even if they've now got a job instead of being on the dole.
Grampa

Tim wrote:
I doubt the prices will rise a huge amount but knowing what people are like if something they are used to paying $15 for suddenly rises to $20 they'll be quick to whinge about it, even if they've now got a job instead of being on the dole.


Yep - most people want everything and don't stop to think that they can't have it both ways.
gonnabuildabuggy

The big impact will be long term.

Would you buy GM/Ford shares if you felt that their future plans/profit was all at the whim of the (volatile) President Trump?

There is a reason why industry/commerce fails to flourish in a dictatorship and this is it.

Right now if I was a US company then I wouldn't be building any plants in Mexico, but then I wouldn't be building any new ones in the USA either in case they become as noose around your neck when you want to close them.

If any one can find examples of protectionism working long term I'd be interested to read them.

EDIT - As Bob alludes to, rising costs in China would help Trump anyway, he could probably get 50% of his results without his bullying (which is what his tweeting is).
Racing Teatray

I'm currently pinning all my hopes on the fact that I think that Donald Trump's only real political ambition is gain a legacy as "THE GREATEST PRESIDENT EVER!" and that therefore he won't do anything actively stupid that could jeopardise that eventuality. This may be quite Panglossian of me…
Frank Bullitt

Racing Teatray wrote:
I'm currently pinning all my hopes on the fact that I think that Donald Trump's only real political ambition is gain a legacy as "THE GREATEST PRESIDENT EVER!" and that therefore he won't do anything actively stupid that could jeopardise that eventuality. This may be quite Panglossian of me…


You're probably right but your (and my) view of what constitutes 'THE GREATEST PRESIDENT EVER' is probably quite radically different to Trump's.

Quite whether a Republican President so openly manipulating the commercial market will go down we'll only time will tell, in the short to medium term it will do him little harm.
PG

Bob Sacamano wrote:
Tim wrote:
JohnC wrote:

By building up the industrial base in USA though, Trump will provide a much more stable platform for the US economy than relying on the vagaries of the foreign exchange markets as we are doing at the moment.


Sure but I bet a lot of the people who voted for him will become dissatisfied at products that were made cheaply overseas suddenly costing a lot more when they're manufactured back 'onshore'.


Will they though? Productivity and competitiveness in US manufacturing is kept high through automation and lower costs (no or low minimum wages, cheap energy, only 10 paid holidays a year etc).
As manufacturing costs rise in China a significant number of companies were already looking to bring production back to the US. Trump may just be in the right place at the right time to benefit politically from this.


It might be true of cheaper stuff that it may cost more if production is brought back onshore - clothes being a particular example maybe. But in the auto industry, bob is right that low wage costs just allow more excess in other areas. When the company I work for did some work with Ford in China about 10 years ago, Ford cut the project costs by not bothering to implement the whole staff time recording and cost allocation to production that would be done (and essential) in a higher cost western plant. Because labour was cheap and they didn't see the point. Result - huge waste of costs on too many staff and inefficient working and the rework percentage needed was enormous. Quality was basically shit.

And I don't ever remember seeing a car or high tech good being cheaper because it is built in a low wage country. Any profit has gone to the company, not the consumer on higher value goods. If it went to the consumer, iphones would be $100.  
gonnabuildabuggy

Automation is the real killer, not the Chinese.

Robots make more sense against a $30 dollar per hour employee than a $3 dollar a day employee.

As has been said earlier, most investment will be in automation not employment but that was happening anyway as Far East labour costs, and also transportation costs (especially) have been rising.

Perhaps supply chain will be where the big wins come?
Bob Sacamano

gonnabuildabuggy wrote:
Automation is the real killer, not the Chinese.

Robots make more sense against a $30 dollar per hour employee than a $3 dollar a day employee.

?


Good point. Robots require a huge investment and have to work 24/7 for ROI. If there's a downturn in demand you can't lay robots off like you can humans.

There's a huge difference between Toyota's highly robotised factories in Japan and the ones they set up in China with large workforces, minimal mechanisation - even to the point of vehicles in production being pushed round on trollies.
gonnabuildabuggy

Nor can you lay off humans in Trumps new America  

That said his new Labour secratary of state is anti the minimum wage so it's going to be very interesting.
Tim

I'm more worried about the stance he's adopting towards things like global warming and foreign policy.

I assume/hope that if they try to step back from things like the Paris climate change agreement that the rest of the world will put pressure on to stop that sort of madness.

Actually, foreign policy is mildly confusing at the moment because Russia have suddenly started acting like a normal country that want to make things better. Weird (and temporary I'm sure).
Tim

I heard on the radio last night there was more bullying from The Donald, this time aimed at Toyota who have a plant in Mexico that builds cars for the US market.
I think that's a dangerous game for him to play with a foreign owned company, if he spreads it too far then presumably the 'home' country will start to retaliate and the US does export a lot of products including various high value aerospace items (Boeing and Lockheed for example).
It'll also, presumably, start to create some anti-American sentiment that may further reduce demand in these markets?

In addition they were reporting this morning that he'd taken to Twitter to continue his rebuttal of the allegations of Russian hacking.
Surely an intelligent person* would wait the few hours until they had seen the briefing that they knew they were going to be getting today in case there was some incontrovertible evidence that ensured they had to actually do something about the activity?


*I know The Donald has shown plenty of signs that he isn't an intelligent man but part of me has always assumed that must be a front  because how else would he have managed to accumulate a reasonable amount of wealth, even if it's not as much as he claims?
The longer his Twittering gets reported the less signs there are of any intelligence.  
Twelfth Monkey

I love Toyota's politely indirect response, pointing out how much it has invested in the US, how many it employs etc.  It's one thing to try to shame your own companies into putting home first, quite another to try to strongarm foreign ones.

And all this from a man who does his utmost to support his country by paying fuck all tax.  Who said hypocrisy is the bedrock of politics?  Oh yes, that was me.
JohnC

Someone needs to pull his Twitter account and remove all ability to use social media, for the good of the USA and the rest of the world.

I am sure someone in the much maligned secret services could set up a parallel Twitter/Facebook etc only linked in to The Donald's phone with a few dedicated people to provide enough response to make him think he is talking to the real world.
Tim

It occurred to me last night that during campaigning he'd made a huge story out of Hillary Clinton's use of a private email account yet he's effectively doing the same.
Of course, as already covered hypocrisy is an important part of politics.


Twelfth Monkey wrote:

And all this from a man who does his utmost to support his country by paying fuck all tax.  Who said hypocrisy is the bedrock of politics?  Oh yes, that was me.


He also managed to 'support' his country by suggesting that spending $4Billion on 2 new Air Force Ones was a waste of money, with the result that Boeing's shares took a steep dive.
Nice Guy Eddie

Its great, what the media never understand is the more shit they give Trump the stronger he becomes as he's seen as the victim of establishment bullying.

Like Brexit, life continues with very little change but we all get our knickers in a twist. American foreign policy's been a disaster for years, he couldn't make it worse so his way could well be the answer, as long as they can keep his mitts off the red button.
PhilD

Trump isn't the president yet and Brexit hasn't happened so how can you say life continues with little change? The media line won't work indefinitely.
Grampa

Although a but dated, perhaps Trump should take some advice from David Cameron: https://www.youtube.com/watch?v=yELHemcQn10
Chris M Wanted a V-10

PhilD wrote:
.... and Brexit hasn't happened so how can you say life continues with little change?


The Sterling exchange rate has plummeted and there are conseqeuntial effects, so there have been changes already.  It's mainly down to speculators and prophets of doom who reckon that post-Brexit won't be as nice as pre-Brexit.  Brexit may not happen but that hasn't stopped someone from speculating - possibly in an attempt to get rich based on currency trading.  Politics is an evil "business"
Bob Sacamano

A falling pound isn't necessarily a bad thing.
Tim

Bob Sacamano wrote:
A falling pound isn't necessarily a bad thing.


Unless you're Jamie Oliver  
Martin

It's a bad thing for me, both for work and (even more importantly) personally.
Bob Sacamano

Martin wrote:
It's a bad thing for me, both for work and (even more importantly) personally.


it's a good thing for our business as we compete internationally so we look cheaper at the moment. Personally it'll make our summer holidays a bit more expensive - if I have one less beer a day it'll even itself out.
Martin

I'd have to drink a lot less beer to even our next trip out, about £850 worth.   That's despite paying for the flights and about half the hotel cost up front before the rate changed.

From a business perspective, all our revenue and the majority of our cost is in Sterling, so it's not a huge issue, but we pay for IT (over 1m Euro a year just for my contract) and some central costs in Euros which has impacted my margin and made hitting budget tighter than I'd have liked.
PhilD

So it's currently 1-1.
Martin

I'm happy for Bob, but still 2-0 for me
gonnabuildabuggy

JohnC wrote:
Someone needs to pull his Twitter account and remove all ability to use social media, for the good of the USA and the rest of the world.

I am sure someone in the much maligned secret services could set up a parallel Twitter/Facebook etc only linked in to The Donald's phone with a few dedicated people to provide enough response to make him think he is talking to the real world.


I do wonder how long it will be once he actually is POTUS that his account gets pulled. For that matter I wonder how many hackers right now are trying to access it.

Tim wrote:

*I know The Donald has shown plenty of signs that he isn't an intelligent man but part of me has always assumed that must be a front  because how else would he have managed to accumulate a reasonable amount of wealth, even if it's not as much as he claims?
The longer his Twittering gets reported the less signs there are of any intelligence.  


Simply by starting out with a massive amount of inherited wealth. I'm not sure why most people are oblivious to how rich his father was.
JohnC

The American investments in my pension have done very well over the past year, so much so I wonder if this is the right time to sell while the £ is still weak against the dollar. However if Donald gets a bit of inflation and rising interest rates into the US economy, things might get even better!
Grampa

Tim wrote:
I know The Donald has shown plenty of signs that he isn't an intelligent man but part of me has always assumed that must be a front  because how else would he have managed to accumulate a reasonable amount of wealth, even if it's not as much as he claims?
The longer his Twittering gets reported the less signs there are of any intelligence.  


I've heard it reported (but I guess there's no way to substantiate it) that his business exploits have actually left him less wealthy than if he'd just left his daddy's money in a deposit account.

If he was such a sharp business man, you'd have to assume that he would concentrate on those businesses rather than constantly looking at ways of chasing Kardashian type fame - I guess becoming POTUS is the ultimate fame goal for any reality TV star!
Bob Sacamano

Martin wrote:
I'd have to drink a lot less beer to even our next trip out, about £850 worth.   That's despite paying for the flights and about half the hotel cost up front before the rate changed.
d.


To be honest if the relatively small fall in the value of Sterling has made that much difference I think someone's taking a lend of you. There's always some unscrupulous traders who will use any excuse to charge extra.
Tim

gonnabuildabuggy wrote:

Tim wrote:

*I know The Donald has shown plenty of signs that he isn't an intelligent man but part of me has always assumed that must be a front  because how else would he have managed to accumulate a reasonable amount of wealth, even if it's not as much as he claims?
The longer his Twittering gets reported the less signs there are of any intelligence.  


Simply by starting out with a massive amount of inherited wealth. I'm not sure why most people are oblivious to how rich his father was.


I had the impression that he started with $200M and increased it from there.

Mrs Tim told me a couple of months ago that his business model was simply to licence his name to buildings, eg Trump Towers, but that previously he'd been a bit of a conman, buying and selling things but not actually properly paying for the things he'd bought.
I find it difficult to believe that he'd get away with that but perhaps he was operating at such high price levels that banks had to support him - like that old saying that it's easier to ask for £1M than £10k?
Martin

Bob Sacamano wrote:
Martin wrote:
I'd have to drink a lot less beer to even our next trip out, about £850 worth.   That's despite paying for the flights and about half the hotel cost up front before the rate changed.
d.


To be honest if the relatively small fall in the value of Sterling has made that much difference I think someone's taking a lend of you. There's always some unscrupulous traders who will use any excuse to charge extra.


Not at all. That's purely the effect of the exchange rate, on hotels (only 7 nights to pay thankfully) not car hire / transfers booked in local currency, plus cash, then what we're expecting to spend.  It's not a small drop, all of those things are now 20% more expensive.  Thankfully I was able to pay for the Sydney hotel up front, that would have been another £400.
Stuntman

JohnC wrote:
The American investments in my pension have done very well over the past year, so much so I wonder if this is the right time to sell while the £ is still weak against the dollar. However if Donald gets a bit of inflation and rising interest rates into the US economy, things might get even better!


I suspect that US investments will do better in sterling terms during 2017. I think that the dollar will strengthen further and also think that the US stock market rally has further to go.  I'm certainly holding onto mine for the time being, but keeping an eye on the situation as you are.  I reckon that selling in the second half of 2017 might not be a bad call though!
PG

Stuntman wrote:
JohnC wrote:
The American investments in my pension have done very well over the past year, so much so I wonder if this is the right time to sell while the £ is still weak against the dollar. However if Donald gets a bit of inflation and rising interest rates into the US economy, things might get even better!


I suspect that US investments will do better in sterling terms during 2017. I think that the dollar will strengthen further and also think that the US stock market rally has further to go.  I'm certainly holding onto mine for the time being, but keeping an eye on the situation as you are.  I reckon that selling in the second half of 2017 might not be a bad call though!


All the signed are that Sterling has further to fall. In my adult lifetime its been damn near parity to the $ and more than 2.2 at times.

In theory the splurge of unfunded US spending under Trump ought to make the $ fall, but the $'s role as world currency means that its value is always going to be artificially higher than the economics means it ought to be.
PG

Martin wrote:
Bob Sacamano wrote:
Martin wrote:
I'd have to drink a lot less beer to even our next trip out, about £850 worth.   That's despite paying for the flights and about half the hotel cost up front before the rate changed.
d.


To be honest if the relatively small fall in the value of Sterling has made that much difference I think someone's taking a lend of you. There's always some unscrupulous traders who will use any excuse to charge extra.


Not at all. That's purely the effect of the exchange rate, on hotels (only 7 nights to pay thankfully) not car hire / transfers booked in local currency, plus cash, then what we're expecting to spend.  It's not a small drop, all of those things are now 20% more expensive.  Thankfully I was able to pay for the Sydney hotel up front, that would have been another £400.


Sad for you, but that's floating FX rates working. As we need to borrow and spend and support a current account deficit that is enormous, Sterling falls. That's the exchange rate shock absorber working. Sterling needed to fall, Brexit or no Brexit. And which is why the fixed FX rate Eurozone is utterly fucking over southern Europe and making Germany artificially rich.
Bob Sacamano

Martin wrote:
Bob Sacamano wrote:
Martin wrote:
I'd have to drink a lot less beer to even our next trip out, about £850 worth.   That's despite paying for the flights and about half the hotel cost up front before the rate changed.
d.


To be honest if the relatively small fall in the value of Sterling has made that much difference I think someone's taking a lend of you. There's always some unscrupulous traders who will use any excuse to charge extra.


Not at all. That's purely the effect of the exchange rate, on hotels (only 7 nights to pay thankfully) not car hire / transfers booked in local currency, plus cash, then what we're expecting to spend.  It's not a small drop, all of those things are now 20% more expensive.  Thankfully I was able to pay for the Sydney hotel up front, that would have been another £400.


The pound to Aussie dollar rate is exactly the same as when we went end of 2013.
Martin

It was over 2 AUD to the pound this time last year and 1.97 in June.   Maybe that was just a particularly good 6 months, but that's the period when I decided on where to stay and the budget.  It dropped to 1.6 straight after the results of the vote were announced and has stayed in the 1.6s.
JohnC

The good thing about holidays (and delayed honeymoons) is that once you are there you just get on with enjoying yourself, spending and seeing new things. Worry about the expense when you get back. You only live once.
Martin

Exactly right and don't get me wrong, it won't spoil my enjoyment or change what we do / where we go at all.  I could have changed hotels or gone for a std room, changed transfer etc, but I haven't, the budget has been increased to compensate.

You do only live once and I aim to enjoy it!

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