The president elect is embroiled in a Twitter war over GM’s production of the Chevy Cruze.
It’s no meaningless thing; General Motors’ stock has fluctuated in the wake of Donald Trump’s comments on January 3.
The GM fracas is the latest chapter in the extraordinary hands-on pressure the president elect has exerted on individual American businesses to keep jobs from going overseas. The same day, Ford announced it was cancelling plants to build a plant in Mexico:
Working class voters who lament those lost jobs helped give Trump the White House after he campaigned against free trade and keeping American jobs in the United States.
Here’s what you need to know:
1. Trump Threatened to Impose a ‘Big Border Tax’ on GM
Trump claims that the big automaker is sending a Mexican-made version of the Chevy Cruze to American car dealers, and he wants the car made in the U.S. – or else.
“General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax!” Trump tweeted.
Specifically, reported CNBC, Trump is “claiming the auto giant is making a Cruze model in Mexico and then sending them to U.S. dealers tax free.”
2. GM Responded That American-Sold Chevy Cruze Vehicles Are Mostly Made in Ohio
According to GM, the Chevy Cruze is already mostly manufactured in the United States – in Lordstown Ohio.
The company does manufacturer the car in Mexico for global sales, Reuters reported. According to Reuters a “small number” of the vehicles are sold in the U.S.
“GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S.,” the company said in a statement.
CNBC reported that GM “sold about 190,000 Cruzes in the U.S. in 2016. About 4,500 of those, or 2.4 percent, were hatchbacks made in Mexico.”
According to USA Today, “Cruze sedans sold in the U.S. are made exclusively at GM’s sprawling factory in Lordstown, Ohio. A plant in Ramos, Mexico, makes the Cruze sedan for foreign markets.”
3. GM’s Stock Fell & Rose After Trump’s Tweet
Showing the power of any tweet from the Leader of the Free World, GM’s stock price fluctuated after the Trump remark.
USA Today reported the stock price fell 0.5% in pre-market trading.
Trump’s GM criticism fits into his campaign rhetoric against the North American Free Trade Agreement, which he blames for “speeding the transfer of U.S. automotive production to Mexico,” USA Today reported.
Some have argued that restricting imports could cause economic harm, reported BBC.
4. Trump Has Taken a Hands-on Approach to Keeping Business in the United States
It’s not the first time that Trump has demanded that a specific business keep jobs in the U.S.
He earned favorable headlines when, shortly after the election, he claimed he (and VP Mike Pence) had worked out a deal to keep some jobs of Carrier, an Indiana company, in the U.S. The company will receive $7 million in incentives, but some have said the deal is not as significant as Trump made it sound.
He also has tweeted about Boeing and Lockheed Martin in an effort to reduce military spending costs of fighter jets.
Trump adviser Kellyanne Conway said Trump personally sent out the GM tweet.
5. Trump Won Michigan By a Slim Margin
Trump won both Ohio – where the Cruze is manufactured for U.S. markets – and Michigan, traditional home to the Big Three American automakers.
The Michigan margin was extremely tight. Trump prevailed in the traditionally blue state by just over 10,000 votes. He also staged several massive rallies in Michigan as he competed for a state that hadn’t gone Republican since 1988.