Jeff Danziger lives in New York City. He is represented by CWS Syndicate and the Washington Post Writers Group. He is the recipient of the Herblock Prize and the Thomas Nast (Landau) Prize. He served in the US Army in Vietnam and was awarded the Bronze Star and the Air Medal. He has published eleven books of cartoons and one novel. Visit him at DanzigerCartoons.com.
DETROIT/WASHINGTON (Reuters) – President-elect Donald Trump on Tuesday threatened to impose a “big border tax” on General Motors Co for making some of its Chevrolet Cruze compact cars in Mexico, an arrangement the largest U.S. automaker defended as part of its strategy to serve global customers, not sell them in the United States.
Trump’s comments marked his latest broadside aimed at an American company over jobs, imports and costs before he takes office on Jan. 20, signaling an uncommon degree of intervention for an incoming U.S. president into corporate affairs.
“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 said in a post on Twitter.
Trump did not provide further details but previously vowed to hit companies that shift production from America to other countries with a 35 percent tax on their exports into the United States. He also has denounced the North American Free Trade Agreement between the United States, Mexico and Canada.
GM, the world’s No. 3 automaker, said it sold about 190,000 Cruze cars in the United States in 2016. All of the sedan versions sold in the United States, or about 185,500, were built at its plant in Lordstown, Ohio. About 4,500 hatchback versions of the Cruze were assembled in Mexico and sold in the United States.
“GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S.” it said in a statement posed on its website.
The Cruze is one of GM’s best-selling cars, although its sales numbers were down significantly in 2016.
Shares of GM rose 1 percent to $35.19 after falling about 1 percent following Trump’s tweet before the market opened.
Since winning the Nov. 8 presidential election, Trump has targeted GM’s rival Ford Motor Co, United Technologies Inc, Boeing Co, and Lockheed Martin Corp. Trump also has touted decisions by companies to keep some production in the United States, including United’s Carrier unit in Indiana.
Last month, Trump announced the formation of a council to advise him on job creation comprised of leaders from a variety of major U.S. corporations including GM Chief Executive Officer Mary Barra.
GM said in 2015 it would build its next-generation Chevrolet Cruze compact in Mexico as automakers look to expand in the Latin American nation to take advantage of low labor costs and free trade agreements. The company said in 2015 it would invest $350 million to produce the Cruze at its plant in Coahuila as part of the $5 billion investment in its Mexican plants announced in 2014, creating 5,600 jobs.
GM said last year it would import some Cruze cars from Mexico.
Trump, a Republican who will succeed Democratic President Barack Obama, campaigned for president using tough rhetoric on trade and promises to protect American workers, and targeted several companies by name.
His latest comments come as a congressional Republican tax proposal meant to boost U.S. manufacturing faces mounting pressure from industries that rely heavily on imported goods or parts.
‘BORDER ADJUSTABILITY’
Last month, 81 industry groups including several automaker groups rejected the proposal, known as “border adjustability.” The policy would help manufacturers by exempting export revenues from corporate taxes. But it would tax imports, hitting import-dependent industries.
According to Automotive News, GM began producing the Cruze in Mexico last year, making 52,631 cars there. In comparison, it built 319,536 of them in the United States. Previous versions of the Cruze sold in Mexico were made in a GM South Korea plant, it reported.
The shift is part of a larger trend among Detroit’s Big Three automakers to produce more small cars for the North American market in Mexico in an effort to lower labor costs, while using higher-paid U.S. workers to build more profitable trucks, sport utility vehicles and luxury cars.
In November, GM said it planned in early 2017 to lay off 2,000 employees at two U.S. auto plants, including the one in Lordstown. U.S. small car sales have been hurt by lagging consumer demand and low gas prices. GM’s U.S. Cruze sales were down 18 percent through November.
GM will halt the third shift at the Lordstown plant on Jan. 23, cutting 1,250 jobs.
Representatives for the United Auto Workers union could not be reached immediately for a response to Trump’s comments.
(Additional reporting by Susan Heavey; Editing by Jeffrey Benkoe and Will Dunham)
IMAGE: General Motors introduces the new 2016 Chevy Cruze vehicle at the Filmore Theater in Detroit, Michigan June 24, 2015. REUTERS/Rebecca Cook
By Nathan Bomey, Detroit Free Press
DETROIT — The number of deaths from accidents caused by General Motors’ defective ignition switch is at least 19, the chief of GM’s victim settlement fund has determined.
Ken Feinberg has awarded settlements to 19 families whose loved ones were killed because of GM’s ignition-switch problem. That’s up from the 13 GM and federal safety regulators have identified — a figure that was expected to rise after more potential victims filed claims.
Families of people who died will get at least $1 million.
Feinberg, who began accepting applications Aug. 1, will take requests through Dec. 31. As of Friday, 125 people had filed applications seeking compensation for fatal accidents allegedly caused by the defective ignition switches. Feinberg said those applications were either still under review or had insufficient documentation.
GM had acknowledged 13 deaths connected to the defect, which can cause ignition switches to turn off when jostled, cutting off power to engines, air bags, and other features.
The faulty switches were installed in Chevrolet Cobalts, Saturn Ions, Pontiac G5s, Chevrolet HHRs, Pontiac Solstices, and Saturn Skys, mostly from the 2003-07 model years. GM has recalled up to 2.6 million of those models.
Feinberg also said he received 58 applications for compensation tied to accidents that resulted in debilitating injuries and 262 applications in cases the involved less serious injuries. He said that so far he had certified four serious-injury accidents and eight less-serious injuries for compensation.
GM’s decision not to recall the cars until early this year — despite evidence that some employees knew of the problem more than a decade earlier — triggered numerous lawsuits and investigations, including a criminal probe by the U.S. Justice Department.
The compensation fund is unlimited, but GM has estimated that it will cost between $400 million and $600 million to settle all eligible claims. That doesn’t include jury awards to victims who choose to sue GM instead of accepting settlements. It doesn’t include any potential government fines.
Feinberg has spelled out criteria for eligibility at GMIgnitionCompensation.com. If he determines the defect was the “substantial cause” of the accident, he will use actuarial tables and average medical cost data to calculate the size of a payout.
AFP Photo/Bill Pugliano
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Washington (AFP) — GM officials came under attack at a Senate hearing Thursday from lawmakers who accused them of “gross negligence” that contributed to at least 13 deaths linked to defective General Motors cars.
While Mary Barra, the embattled chief executive of America’s largest automaker, returned for another congressional grilling, the man GM hired to determine the compensation for crash victims made his first appearance on Capitol Hill.
Compensation expert Ken Feinberg, who has said GM would offer at least $1 million for each death linked to faulty ignition switches in GM cars, assured lawmakers that the compensation fund had no limits.
“We are authorized to pay as much money as is required,” Feinberg told a Senate panel.
As lawmakers praised Feinberg’s independent work, they blasted Barra and GM chief counsel Michael Millikin for the company’s “culture of diffused responsibility” that prevented or shielded key executives from knowing about the years-long problem.
Lawmakers are investigating the company’s recall of 2.6 million cars that began only last February, 11 years after the company discovered ignition switch problems related to dozens of accidents and at least 13 deaths.
GM, which also is under federal investigation for the delayed recall, has been slapped with a $35 million fine and is facing potentially billions of dollars in compensation costs.
Senator Claire McCaskill, chair of the Commerce, Science, and Transportation Subcommittee, pointed to a series of “tragic management failures at General Motors,” as well as years of legal obfuscation that showed “indifference, incompetence and deceit” in one of the most serious safety crises in the company’s history.
“It is very clear that the culture of lawyering up and Whac-A-Mole (at the Detroit manufacturer) killed innocent customers of General Motors,” McCaskill said.
She expressed incredulity that despite at least four separate internal warnings beginning in 2010 that GM could face punitive damages over its ignition switches, Millikin knew nothing about the issue until the recalls were announced this year.
No pre-2014 filing was made to the Securities and Exchange Commission, nor was GM’s board of directors informed of the issue until this year, Millikin said.
“This is either gross negligence or gross incompetence,” McCaskill boomed.
– ‘People died’ –
An exhaustive and damning internal GM report found major shortcomings in the legal department, which has been accused of fighting lawsuits by accident victims in connection with the defective cars.
Fifteen employees were dismissed, but not Millikin.
“How in the world in the aftermath of this report did Michael Millikin keep his job?” McCaskill asked.
GM chief Barra reiterated that her company “accepted responsibility for what went wrong” and “we will do all we can to make certain that this does not happen again.”
The automaker, she added, would pay the compensation determined by Fineberg as soon as possible. Feinberg has until the end of this year to gather claims in the case.
But when Barra sought to lay out the steps taken to assure that the information problems not happen again, Senator Barbara Boxer cut her off.
“You just can’t say ‘now, now,’ and forget the past. People died,” Boxer said.
“We have to find out what happened.”
AFP Photo / Brendan Smialowski
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