CNBC: GM EV Effort Better Prepared Than Ford For Tariffs – CleanTechnica

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A few days ago, CNBC ran a story about GM’s confidence in the face of the threat of tariffs on Mexico and Canada, countries where U.S. domestic automakers have a sizable footprint. If the numbers are to be believed, GM is in a better position to weather tariffs than Ford is, despite a significant presence in Mexico.

While specific details aren’t shared in the article, GM’s people are saying that they have specific plans. But, because the situation hasn’t fully developed, they don’t know exactly which set of plans will be needed. Execs are confident that GM can mitigate 50% of potential tariffs in the short term without needing to deploy capital. If tariffs are prolonged, the company has other levers it can pull, such as shifting production of vehicles and parts.

This is particularly important because tariff uncertainty recently led to a dropped stock price two weeks ago. With investor confidence shook and even thinner details shared at that point, the stock price dropped 8%. GM seems to hope that with these further details, investors will feel more confident in the short-term future of the company.

The article then goes on to contrast GM’s confidence with Jim Farley’s (Ford’s CEO) statements about the “chaos” Trump’s tariffs would cause if Canada and Mexico don’t cave in to his demands.

“President Trump has talked a lot about making our U.S. auto industry stronger, bringing more production here, more innovation in the U.S., and if his administration can achieve that, it would be one of … the most signature accomplishments,” Farley said during the same investor conference. “So far what we’re seeing is a lot of cost, and a lot of chaos.”

The Time For Obeying In Advance Is Over

One investment both companies might regret at this point was spending $1 million on Trump’s coronation inauguration. The companies also spent good money providing vehicles for Trump to use, so the total amount donated (both in cash and in kind) is unknown. While this was a fairly obvious ploy to get better policy out of Trump, the strange priorities of the Trump Regime don’t seem to have these companies’ wellbeing in mind.

If we look at what happened here, the lesson is clear: you can never get a good deal out of someone like Trump by giving in early. Or, as expert on authoritarian regimes, Timothy Snyder, says, “Never obey in advance.”

He goes on to say, “Most of the power of authoritarianism is freely given. In times like these, individuals think ahead about what a more repressive government will want, and then offer themselves without being asked. A citizen who adapts in this way is teaching power what it can do.”

Normally, helping politicians in advance yields the typical rent-seeking cycle. Donate, lobby, get good policy, and then donate again. Both big companies and politicians benefit from this arrangement, even if it ends up coming at the expense of taxpayers and customers in the end. But now, the companies are dealing with a very different kind of animal, and it’s one they’re not accustomed to dealing with.

Featured image by GM.