General Motors has taken Donald Trump to the woodshed.
Robert Reich writes that GM has shown Trump that 'America First' never trumps 'shareholders first.'
In 2010, when GM emerged from the bailout and went public again, it boasted to Wall Street that it was making 43% of its cars in places where labor cost less than $15 an hour, while in North America it could now pay “lower-tiered” wages and benefits for new employees.
So this year, when the costs of producing many of its cars in Ohio and Detroit got too high (due in part to Trump’s tariffs on foreign steel), GM simply decided to shift more production to Mexico in order to boost profits.
In light of GM’s decision, Trump is also demanding the company close one of its plants in China. But this raises a second reality of shareholder-first global capitalism that has apparently been lost on Trump: GM doesn’t make many cars in China for export to the United States. Almost all of the cars it makes in China are for sale there.
In fact, GM is now making and selling more cars in China than it does in the United States. “China is playing a key role in the company’s strategy,” says GM’s CEO, Mary Barra.
Even as Trump has escalated his trade war with China, GM has invested in state-of-the-art electrification, autonomous vehicles and ride-sharing technologies there.
...In shareholder-first global capitalism, technology doesn’t belong to any nation. It goes wherever the profits are. If a particular technology is vital to American national security, the US government could stop American corporations from doing business in China – just as it does, in effect, when it blocks Chinese companies from acquiring American components if the purchase poses a national security threat.
“Making America great again” has nothing to do with making American corporations great again. Big American-based corporations are doing wonderfully well, as are their shareholders.
The real challenge is to make American workers great again. They don’t need just any jobs. They need good jobs, akin to those that GM’s unionized workers had a half-century ago. Most Americans haven’t had a raise in decades, considering inflation.
...American corporations exist to advance the interests of their shareholders, who aren’t prepared to sacrifice profits for more and better jobs for Americans.