I only watched a brief portion of the GOP debate in SC last night. I was appalled and quickly repelled by a number of factors: The audience seemed biased and I assumed stacked by some one; their behavior was boorish and more appropriate for a WWF grudge match. The moderator, again, a partisan democrat hack. The candidates with the exception of Kasich and Carson seemed focused on calling the other liar. However one point by Trump particularly caught my attention – his response on Carrier’s recent announcement they would close a factory in Indiana and move the operation to Mexico.
Trump responded to a debate question about this story with a brilliant, simple plan – Trump would tell them not to move and threaten to work with congress to pass a tax on their product imported from Mexico. Brilliant and simple, saving some 1400 jobs. The imperial Donald as Jean Luc Picard “…Make it so…” Trump would like us to believe he can save jobs or return manufacturing to the U.S. simply by force of will, ignoring economic reality.
A rather cursory investigation hasn’t yielded much detail on the decision other than some generalities about being closer to suppliers based in Mexico and competitors based there. Obviously labor rates are a key consideration but other factors, some under government control must enter into the decision:
- What effect does Obamacare have on their labor costs?
- Have recent EPA rulings on coal power plants impacted electricity costs?
- Is the plant facing major upgrades and potential permitting issues?
- Has the sluggish economy reduced demand, hence an evaluation of capacity and consolidation to reduce costs?
I’m sure some one closer to manufacturing economics can think of other factors as well. The point is that Trump ignores the reality on the ground, would like us to believe the solution is simple, and probably believe it himself. An imperial edict to continue operating a marginal or uneconomic facility will save jobs.
I have seen little evidence that Trump has firm guiding principles. He believes everything is negotiable and that he is the consummate deal maker. I will concede that Trump has few billion dollars more than I do. However his fortune is actually a large inheritance from his father that has grown about the same as the return on a stock index fund over the past forty years. He has not out performed the market. He has no experience actually manufacturing anything. His comments about returning Apple manufacturing to the U.S or forcing Carrier to remain simply demonstrate his lack of seriousness or qualification.