Trump Tweets Threats of Big Taxes to GM Over Small Cars; Ford Rearranges Plants Much to Trump’s Delight; Trump’s Trade Pick China’s Worst Nightmare?

Small-fry…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Trump is tweeting again, this time going after General Motors. The President-elect wants to slap some big ugly taxes on the auto company because it imports Chevrolet Cruzes from Mexico instead of making them in the United States. But here’s where things get dicey: According to GM, only the hatchback version of the car is made in Mexico, and are meant for global distribution. The sedans, however, are made in Ohio. Ohio. In fact, of the 172,000 Cruzes sold last year, only 4,500 of them came from Mexico.  Even the United Auto Workers Union doesn’t care if GM does assemble those cars in Mexico since the Ohio factory isn’t equipped to make the hatchbacks. (Incidentally, over 1,000 employees at this plant are getting laid off soon.)  Besides, it’s alot of fuss to make about a car whose sales were down 18% in November.  The fact is, low gas prices are leading to higher sale of of SUV’s and trucks.  And the Chevrolet Cruze doesn’t figure in very nicely here.  Which all probably explains why this latest Trump tweet didn’t even harm the stock.  While it did lose some juice early on, it rebounded into positive territory very very quickly.

Adios…

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Image courtesy of ponsulak/FreeDigitalPhotos.net

In the meantime, just hours after Trump used his social media account to lash out at GM, Ford announced that it is officially scrapping plans to build a $1.6 billion assembly plant in Mexico. But that doesn’t mean its ditching our neighbor to the south. Instead, Ford will continue making Ford Focus compact cars in an existing plant there while taking $700 million from that budget to upgrade a plant in Michigan for building electric cars. And bonus: 700 jobs would be added to the mix for that Michigan plant. It’s all part of a bigger $4.5 billion plan that Ford had in place to manufacture 13 new models of both electric and hybrid cars. A win-win, no?  There are plenty who think it’s just a win for Trump, who made it clear that he’s not into NAFTA and that manufacturing cars in Mexico only hurts the U.S. economy.  They also think Fields scrapped his original plans in an effort to make nice with the incoming President, not to mention, avoid tariffs. However, Fields said he was planning to make this move anyway, whether Trump was elected or not. Which doesn’t explain why construction on the new plant already started in May. But anyway, you needn’t cry for Mexico…just yet. The existing plant in Mexico will be adding 200 jobs there as well, so that country doesn’t come out a total loser either. While shares of Ford rose on the news today, can you guess what happened to the peso? It took a .9% hit against the dollar.  How do you say “ouch” in Spanish?

In other Trump business news…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The President-elect has set his sights on his pick for the U.S. Trade Representative post. Enter Robert Lighthizer, a Reagan administration alum, who has spent the last thirty years representing major companies in anti-dumping and anti-subsidy cases. Presumably, he was incredibly successful in that aspect of his career, or else Trump might not have looked in his direction.  According to Trump,  Lighthizer has made some very effective deals that protected significant sectors and industries in the U.S. economy. Yowza. Trump’s banking that Lighthizer will do something about “failed trade policies which have robbed so many Americans of prosperity.” That’s a definite plus for working in the Trump administration. As Trump’s top trade negotiator, one of Lighthizer’s major duties will be to try and reduce that pesky trade deficit and apparently, he has a knack for making deals that do just that. Lighthizer doesn’t care for the trade policies we have in place for China, so be sure to watch the drama that unfolds as he goes after one of the world’s largest economies. You can expect some big changes in that arena and damned be the Word Trade Organization rules if it comes to that. Which it just might considering Lighthizer’s not that into the WTO.

Latest Lousy Jobs Report; Wendy’s Is Losing its Buns. Sort of; Are Commercial Drones Finally Taking Flight

Book of jobs…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The private sector added 169,000 new jobs but that’s nothing to celebrate. Well those 169,000 people who will now be collecting paychecks can celebrate but that’s about it. While that number seems significant, and in some ways it is, it is actually the lowest number we’ve seen since January of 2014. Experts expected growth of up to 224,000, as last month’s job growth came in at 175,000. Celebrating occurs only when the numbers go up. Drops like these don’t necessarily mean the economy is about to head south, but it can suggest periods of sluggish growth are on the horizon. This gloomy news is brought to us by ADP, the largest private payrolls processor in the United State and they’ve got the dirt on the digits. But we’re still waiting on the U.S. Labor departments figures, due Friday, which are apparently more detailed and include both the public and private sectors, and may even supply us with better figures. And on the bright side, April’s growth rate wasn’t nearly as abysmal as March’s growth of just 126,000 jobs. So there’s always that heart-warming fact to fall back on.

Where’s the buns? 

Image courtesy of  atibodyphoto/FreeDigitalPhotos.net

Image courtesy of atibodyphoto/FreeDigitalPhotos.net

Wendy’s restaurants just came out with its earnings and announced it will be selling 640 restaurants. Taking a page from McDonald’s playbook, Wendy’s is hoping that franchising costs will help the chain take in between $400 million to $475 million. The restaurant plans to sell 380 restaurants in this year alone. So if your lifelong dream is to own a Wendy’s, this might be your chance. Wendy’s is definitely having a better quarter than McDonald’s, as the company, famous for its freckle-faced braided redhead, and I guess its food too, took in first quarter earnings of $27.5 million and 7 cents a share, just barely beating analysts expectations of 5 cents a share. However, revenue was down almost 11%. Oh well. Maybe next quarter. Wendy’s also announced that it’s selling its bakery operation in Zanesville, Ohio, which conveniently supplied the chain’s buns. While the folks in Zanesville might not be thrilled, the folks on Wall Street were and sent shares up over 7%. Shares of the company are up over 30% in the last twelve months so clearly someone over there knows what they’re doing.

Droning on and on…

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Image courtesy of bplanet/FreeDigitalPhotos.net

Drone enthusiasts, rejoice! FAA Administrator Michael Huerta announced that the FAA is going to figure out how drones and other aircraft can share all that airspace safely. At the Unmanned Systems 2015 Conference, Huerta said, “Integrating unmanned aircraft into our airspace is a big job, but it’s one the FAA is determined to get right.” This exciting mission will be done through the Pathfinder Program, which will study commercial drones and all the great and lucrative ways they can be used. For instance, CNN wants to see how to gather news with drones in heavily populated areas. A company called PrecisionHawk wants to test it out for the agricultural industry to see how drones can help monitor crops. Then there’s Berkshire Hathaway company, BNSF, a railroad company, that wants to use drones to inspect tracks. Such clever usage. Surprisingly mum on these new developments was Amazon, who has long wanted to use drones to make deliveries. Amazon, if you recall, wasn’t too happy about the FAA’s rules that were proposed in February and let the FAA know it. And if you think the use of drones will take jobs away from actual human beings, then check out the reports from the  Association for Unmanned Vehicle Systems International which estimates that thousands of jobs would be created and  generate hundreds of millions of dollars. And judging by last month’s Labor report, this drone “thing” just keeps sounding better and better.

Walmart’s Court-ing Big Problems; What’s in a Name? Ask Chrysler, If You Can Still Call It That; Stuyvesant High Schooler Fails in Lying;

 Hitting a Wal…mart…

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Image courtesy of nirots/FreeDigitalPhotos.net

Walmart’s lawyers have been especially busy this year. But not to Walmart’s advantage, it would seem. The retailer just got word that a Pennsylvania supreme court upheld a lower court’s ruling from 2007 that it has to pay over $150 million to approximately 187,000 employees who sued the the company in a class action suit. According to the lawsuit, Walmart stiffed employees by not compensating them for rest/meal breaks, or actually making them work through those breaks and then not paying the unrested, hungry employees for that time. Of course, Walmart is considering appealing the ruling, whose amount is sure to put a major dent in its quarterly earnings. I’m guessing you’re not as choked about that as Walmart execs are. Then there was last weeks’ decision by a National Labor Relations Board administrative law judge who found that the US’s largest employer also threatened employees in California because they tried to organize. Back to today, the lawyers and family of John Crawford, who was shot inside a Beavercreek, Ohio Walmart , named the corporation in a lawsuit. The lawsuit alleges that Walmart did not provide a “reasonable place to shop” because a bb gun involved in the shooting was left unpackaged in the store for two days.

What’s your name again?

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Image courtesy of olovedog/FreeDigitalPhotos.net

Chrysler Group LLC it isn’t. Well, it was. Up until Tuesday morning when the automobile manufacturer announced it was changing its name  to “FCA US LLC.” Got that? Neither did I. But apparently this name fits in better, globally, anyway, with its parent company Fiat Chrysler Automobile NV. But it’s okay if you forget and call a Chrysler a Chrysler, because those cars will still be made and be called Chryslers, along with Jeeps, Dodge and Fiats, who are all also keeping their names. The company – and name – which originated in 1925, with some vision and assistance from the very industrious Walter P. Chrysler, employs 77,000 people all over the world and has 36 manufacturing facilities, with 23 in the United States alone.

He lied! He lied!

Image courtesy of africa/FreeDigitalPhotos.net

Image courtesy of africa/FreeDigitalPhotos.net

Looks like Mohammed “Mo” Islam is not such a whiz kid after all. After a story appeared in New York magazine about a 17 year old Stuyvesant High Schooler who was rumored to have pocketed $72 million in the stock market, it turns out none of it was true.  The story was picked up by just about everybody, including this blog, and the young man and a friend were even scheduled to do an interview on CNBC to discuss their non-existent success.  However, New York Observer’s Ken Kurson, and a team of media and legal professionals uncovered the hoax, after noticing how so many many people questioned the story, which first picked up steam inside the hallowed halls of Stuyvesant High. Apparently the only trades Mohammed ever made were simulated ones and his fortune is more akin to the fake kind you might find in a board game. New York magazine did issue an official apology, but it seems that it’s the wrath and disappointment of Mohammed’s parents who will make Mohammed come to rue his dubious actions. According to Mohammed, his dad, “wanted to disown me. My mom basically said she’d never talk to me.” And who can blame them.