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Okay, I'll go.
The big news this weekend was that Trump had a rally and said that, should he not be elected, the U.S. auto industry would be overrun with cheap Chinese imports. He used the word "bloodbath".
The mainstream media, which we're assured rarely tells outright lies, decided to find the exact dividing line between an outright lie and "still technically the truth". You can be the judge of whether they succeeded. For just one of many examples, Joe Scarborough ran a segment where the words "Trump warns of a bloodbath for America if he loses" were emblazoned on the bottom of the screen.
Of course, if any of this surprises you in the slightest, you haven't been paying attention. It's slightly boring at this point and would be funny except so many boomers still watch that dross.
What I want to focus on is the actual substance of Trump's claim. I think that, this time, Trump is on to something. The Detroit auto industry is about to have a head-on collision with China and get absolutely wrecked.
Already, Detroit is not in good shape. The Big 3's share of U.S. auto sales has fallen from 90% in 1965 to just 44% by 2018. (I'm sure it's much lower now). It gets worse. The only reason that Detroit has done this well is a 25% tariff on foreign light trucks that was passed by LBJ in retaliation for European tariffs against U.S. chicken.
In terms of small cars, Japanese automakers have been beating Detroit for decades. For luxury vehicles, Germany has worldwide dominance. That leaves only light trucks and SUV's, where Detroit still performs well only due to tarriffs. We've sort of forgotten about Detroit since 2008. The perception is that things were bad for awhile, but then the automakers got bailed out and they're okay now, especially #girlboss CEO Mary Barra.
This isn't true. The stock prices of the Big 3 have limped along. GM, once the 2nd most valuable U.S. company, now has a market cap only 2% the size of NVIDIA. And, if the Big 3 haven't gone bankrupt again, it's only by jettisoning high-paid union labor. Michigan, once a well-off state, now ranks 39 out of 50 in household income, falling well behind former hick states like Texas and North Carolina.
Enter China.
China is already, by far, the world's largest producer of automobiles, producing about 3x as many as the U.S. Also, China can sell an EV for $10,000. While I'm sure there would need to be changes for the U.S. market, it would not be too expensive at scale. Get ready for hordes of these "shitty but good enough" cars to enter the market.
"No one will ever buy a Chinese car" you laugh, nearly dropping your monocle into your glass of cognac. I don't think this opinion can withstand serious scrutiny. Japanese cars once had a similar reputation. Nowadays, choosing to buy an American car over a Japanese one is seen as either extremely patriotic or moronic. Even if quality never improves, people still buy plenty of Kias and Hyundais. How many more would they buy if the price was reduced by 30-50%?
So let's say all of this is true. A wave of Chinese imports are coming which will cripple the U.S. auto industry. How will voting for Trump help? My gut feeling is that Trump can't save Detroit but that, unlike Biden, he'll at least try.
For most of the period of the 1980s-present, the world has been a huge beneficiary of free trade. The rich in the U.S. have grown much richer, obscenely so. But the biggest gains have been won by the working class in developing nations, especially China. Despite all that there have been losers. The biggest losers are the working class in rich nations, especially in areas that compete with China.
The traditional government solution to manufacturing being outsourced has been to offer job retraining and lots of government benefits to the affected class. But this just doesn't work. The places that have been affected by blue collar job loss are now hollowed-out shells of their former selves.
Trump will probably at least try to ban or tax Chinese cars. Is this the right thing to do? Maybe, maybe not. It will cost American consumers a lot of money, and it will depress wages in China. In aggregate, the tariffs will probably make the world a worse place. But they will help the group that has lost so much and which has been ignored and scorned for decades. The group Biden pretends to care about but which Trump actually does.
Edit: Just saw this retweeted by Crémieux:
America's most affluent metro areas in 1949: https://twitter.com/DKThomp/status/1769891112095740274/photo/1
You'll never guess who's #1.
I don't think that is the perception, but I guess it must be yours, because it misses a yuge number of developments since then.
Detroit won't be competing with any $10,000 import hatchback, because they don't even make anything small anymore. Ford literally makes nothing in a sedan or coupe except the Mustang. GM still makes the Malibu, for some bizarre reason, and a couple Cadillac also-rans. Ford, GM, and Chrysler spent decades trying to make a family sedan to compete with the Camry and the Accord, and failed completely. They never managed to produce a car that matched the Camry and Accord in quality, reliability, or features. Eventually, they just ceded the space altogether, and refocused on SUVs and trucks exclusively.
At the same time, Ford and GM poured billions into Lincoln and Cadillac over the years, trying to develop luxury brands that would go blow-for-blow with the Germans. They failed, spectacularly, over and over, then landed ass-backwards on a successful luxury branding with the top trim six figure pickup truck. The only American car company to successfully build a luxury sedan to compete with the Germans is Tesla.
Luckily, fat American tastes run towards unnecessarily large pickups and SUVs. But for the $10k import hatchback, the question quickly becomes: what used car are you competing against for $10k? Prior recent efforts at bottom-tier economy cars have largely failed in the USA because of the increasingly quality and survival of used cars, which for various reasons are less of an issue in other markets. The average car on the road is entering its second year of middle school. Will people purchase a Chinese car new over an older Escape or Rav4? Time will tell.
Tesla's success can largely be attributed to building EVs as status symbols, EVs that were functionally superior to every ICE car on the road, looking great and blowing them out of the water on acceleration, silent and potent. Tiny EV penalty boxes have failed over and over, because they deliver a worse experience than an equivalent ICE car. Maybe Chinese manufacturing will solve that problem.
I've often felt that a significant part of the defeat of the Big 3 was just mind-share. I daily a Buick from the 2010s, and it has met my needs in every way. I've never had to put it in the shop beyond tires, fluid changes etc. It's a great car in general. But by the 2010s, the battle was already lost - there was no car that Americans could put out that would displace Toyota and Honda in the minds of the American public.
On Reddit, if cars are mentioned in any thread, you will never see a recommendation other than Toyota or Honda. It is 100% lockstep. Even if you could get 90% of the reliability from an old Ford Taurus at 50% of the cost, the hive mind has decided. I do get that - I've ridden in a Pontiac Le Mans. I've driven a Plymouth Volare. They fucked up for decades. But I hated it when the Big 3 bailed out of the sedan space, just because there are far fewer options now; and by the end, the cars were quite good.
Weren't they losing money on every sedan sale? They didn't quit so much as fail.
I will have to research that. I know Chrysler was at the end, but I'd be surprised with regards to Ford. They sold many millions of sedans in the 90s and 2000s.
Honestly, the same was true of Chevrolet; they were making six-digit (as in, 100-200 thousand) sales of their compact sedans at the time.
They aren't actually bad cars, it's just that the early-90s through mid-00s Hondas and Toyotas were objectively the best cars ever made and that bought them customers for life, even though Civics and Corollas now cost twice what they used to (and are 1.5x as large).
Meanwhile, Gen Z buys Korean, and they're even more unreliable than mid-00s Big Three cars because their engines go before 100,000 miles due due to incompetence (machining chips not cleared properly kills the normal engines) and premature cost-cutting (undersized rods flying through the blocks of turbocharged engines). Detroit-designed cars might not be as solid as Toyota's, but their engineering was/is still good enough that, just like the Japanese cars, the main reason they stop working is because they rusted out.
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https://thenewswheel.com/ford-killing-value-destroying-sedans-because-they-lose-money-every-year/
Taking this at face value, Ford lost money selling sedans the year before they simply stopped making them.
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