Tuesday, November 27, 2018

Trump Explodes: GM Eliminates 14,000 Jobs, Closes 5 Plants

General Motors announced Monday that it planned to idle five factories in North America and cut roughly 14,000 jobs in a bid to trim costs.

This is simply a business decision. Obviously, the costs involved in running the five factories and employing the 14,000 jobs could not be done profitably.

The costs, price signals. on a daily basis signal to business operators what projects make sense to be taken on and continued and which are not profitable because the total resources required are being demanded at higher prices elsewhere.

This type of shift is a naturally occurring event in the economy that occurs all the time.

It should be cheered on as making the economy ex ante more efficient and productive.

However, the economic illiterate president is doing the exact opposite. He is threatening GM and says they better find new projects for the idled plants.

“They better damn well open a new plant there very quickly,” Trump said in an interview with The Wall Street Journal on Monday, noting that he talked to  GM Chief Executive Mary Barra Sunday night.

"I told them, ‘You’re playing around with the wrong person,’” Trump said.

This, in effect, is Trump demanding GM to become less efficient. It is fascism-lite. What a horror. Trump is just too dumb to realize:

A, He is attempting to central plan parts of the US economy when he makes these kinds of demands


B. Central planning of any part of an economy never works. It causes inefficiencies, bottlenecks and a lower standard of living for all.



More from The Wall Street Journal interview:

 "I spoke with Mary Barra, the head of General Motors last night. I said: I heard you’re closing your plant. It’s not going to be closed for long, I hope, Mary, because if it is you’ve got a problem."


  1. --- "I told them, ‘You’re playing around with the wrong person,' Trump said." ---

    It's much worse, RW. Trump takes these things personally, like a dictator would. He's not only foolish, he's dangerous. What is he going to do? Strong-arm the company into making make-believe jobs for his supporters?

  2. Isn't this the man who was proud of his tag line, "You're fired!"?

  3. Even a website formally under the gawker brand is pointing out that the key plant being closed was built via government. https://jalopnik.com/a-part-of-detroit-was-destroyed-in-the-1980s-so-gm-coul-1830666242 This plant was the prototype for what happened later in New London.

    So we have a corporation bailed out by government looking to close a plant built with government force used for its benefit getting a complaint/threat from the person holding the highest elected government office. Maybe GM now feels a bit like the homeowners that lost their property via government force?