Cadillac Doubling Down on new Sedans, Investing $175 million

[David]

https://www.freep.com/story/money/cars/general-motors/2018/06/18/gm-lansing-cadillac-plant-invest-sedans/709883002/

Seems GM is not going to do what Ford is doing, Sedans will stay as a part of their portfolio and they are by 2021 going to have two new sedans in the Cadillac portfolio with a $175 million investment at the Lansing Grand River Plant.

They say Cadillac has increased sales in China by 51% over 2016 surpassing the amount of Cadillacs sold in the US when compared to China. For 2018, Cadillac sales in the US increased 8.1% and 22.5% in China to 96,321 sales in China for the first quarter.

They confirm what many of us knew that XT6 will come out in 2019 as a 2020 model and of course the XT4 this fall. XTS will end production in Oshawa, Ontario after this year.

[Drew Dowdell]

And China just lowered the tariff to import cars into the country too... 

[balthazar]

^ Hmmm; an admittance that protectionism 'doesn't work'?

Or a gesture towards lessening an existing trade war?

🤔

[Drew Dowdell]

1 hour ago, balthazar said:

^ Hmmm; an admittance that protectionism 'doesn't work'?

Or a gesture towards lessening an existing trade war?

🤔

This was decided back in April

[balthazar]

Talk about these issues far precedes April tho.

[Drew Dowdell]

9 hours ago, balthazar said:

Talk about these issues far precedes April tho.

Not that far. Late Jan 2018 is when Trump announced the opening salvos in the trade war.... that is, actually announcing tariffs. I know because I watched the stock market drop. 

[balthazar]

Not that; talk about unfair import tariffs / company partnering in the Chinese market. That's years and years and years ongoing. Chinese import tariffs were (until minutes ago) 25%; the same rate being characterized as a "trade war" from the US side of the issue.

Edited June 20, 2018 by balthazar

[David]

Gonna be an interesting view come this fall for elections and how costs will affect people here. Could really change the way people buy things as they might just think twice about where they spend money.

Course this has got to be hurting Walmart the seller of almost all things Chinese. Think this will hurt the poor the most.

[ccap41]

All of this China talk got me thinking.. What's gas cost in China? 

when converted to US Dollars and US gallons it appears they've been between $4.10-$4.40/gallon in 2018 

[David]

This weeks issue of Mad Money with Cramer has a valid question:

Will China put tariffs on their largest employer and one of their largest production product lines APPLE? It is an interesting Trillion dollar question.

https://www.cnbc.com/2018/06/19/cramer-the-trillion-dollar-question-on-us-china-trade-is-about-apple.html

2 minutes ago, ccap41 said:

All of this China talk got me thinking.. What's gas cost in China? 

when converted to US Dollars and US gallons it appears they've been between $4.10-$4.40/gallon in 2018 

So according to this site that I follow:

https://www.globalpetrolprices.com/China/gasoline_prices/

Chinese are paying 7.57 yuan per liter for gas on average. That equals to 1.17 US as of today's currency exchange. 

At 3.785 liters per gallon that equals = $4.42 per gallon which as you say is on par with a higher gas cost than here.

I do wonder how this will play out in the auto industry. I honestly do not see a reduction as they seem to be in the golden age of auto's compared to the US. 

[Suaviloquent]

Now there’s a cost to long ass complicated and dumb supply lines.

another factor is that comparative advantage is really easy to explain when you have simple economies of bread, cheese and tomatoes and your finished product is pizza. I hate how the economists preach free trade when trade with dictators and America has never been free, and both sides mess each other over.

China’s 2025 make everything Chinese great again program won’t work unless they relax their rules. 

I actually applaud Trump admin for doing this, but they have to go after the pass-through countries too.

No point in tariffs on China if fake honey is shipped bulked to a port in Malaysia with then a Malay flagged vessel taking the cargo and dumping it on American ports.

 

most importantly it’s become abundantly clear that a large trade deficit is bad. It’s majorly bad. And if the American consumer is trained to buy imports tariffs or subsidies with their deadweight losses are literally the only way to bring the manufacturing or production back and reduce the deficit. I’m not saying jobs though...those are gone forever.

 

 

[Suaviloquent]

3 hours ago, dfelt said:

Gonna be an interesting view come this fall for elections and how costs will affect people here. Could really change the way people buy things as they might just think twice about where they spend money.

Course this has got to be hurting Walmart the seller of almost all things Chinese. Think this will hurt the poor the most.

Well you know they’ve been saying for a long time that Americans need to consume far less goods and services and save more. 

 

Most likely you’ll see Walmart just substituting suppliers from lesser-tarriffed countries. 

It’s pretty obvious, American standards of living have to be reduced to invest in the future. Probably means less conspicuous consumerism. More saving. More debt repayment. Less cars, less phones, less discretionary spending, hell, even a smaller military. 

 

Cut it the discretionary and spend only on the mandatory. And get rid of government programs that produce deadweight losses. Which effectively means dismantling the government’s worst parts and doubling down on infrastructure, education and healthcare.

 

Which won’t happen

 

 

[David]

21 minutes ago, Suaviloquent said:

Well you know they’ve been saying for a long time that Americans need to consume far less goods and services and save more. 

 

Most likely you’ll see Walmart just substituting suppliers from lesser-tarriffed countries. 

It’s pretty obvious, American standards of living have to be reduced to invest in the future. Probably means less conspicuous consumerism. More saving. More debt repayment. Less cars, less phones, less discretionary spending, hell, even a smaller military. 

 

Cut it the discretionary and spend only on the mandatory. And get rid of government programs that produce deadweight losses. Which effectively means dismantling the government’s worst parts and doubling down on infrastructure, education and healthcare.

 

Which won’t happen

 

 

Yup, Like what your saying but doubt it will happen.

GOP want to cut SS and Medicaid but hands off as they ramp up spending on Defense.

https://www.washingtonpost.com/news/business/wp/2018/06/19/house-gop-plan-would-cut-medicare-social-security-to-balance-budget/?noredirect=on&utm_term=.8c523dad66de

We spend way too much on defense and attempting to be the Global police force and we spend way too much on the Socialist liberal agenda of feed everyone, cloth and give a roof over your head which is also hurting us. 

Help enough to get people going but not give them everything and lets honor our retires that worked and paid into SS and Medicaid. Two areas that SHOULD NOT be reduced.

BACK ON CADILLAC - I like the constant growth of the Chinese market and really hope this continues for GM there so that Cadillac can get back to their glory days or at least close to them.

[Drew Dowdell]

Back away from the politics.

[David]

Just now, Drew Dowdell said:

Back away from the politics.

Yes, sorry for the side trip.

Seems that as per @Drew Dowdell stated about the reduction in tariffs for imported auto's that the percent would be 15% down from 25% and now it seems that in an update, China just dropped it to 6%.

http://money.cnn.com/2018/05/22/news/economy/china-cuts-car-tariffs-imports/index.html

Seems that by 2022 the restriction of outside companies having manufacturing plants and ownership without a 50/50 Chinese partner will go away too.

This is good news for GM and building of more Cadillacs in China.

[Suaviloquent]

25 minutes ago, Drew Dowdell said:

Back away from the politics.

Yessir

[balthazar]

4 hours ago, dfelt said:

Seems that as per @Drew Dowdell stated about the reduction in tariffs for imported auto's that the percent would be 15% down from 25% and now it seems that in an update, China just dropped it to 6%.

http://money.cnn.com/2018/05/22/news/economy/china-cuts-car-tariffs-imports/index.html

Seems that by 2022 the restriction of outside companies having manufacturing plants and ownership without a 50/50 Chinese partner will go away too.

Amazing progress. Hope major advantages are realized for US manufacturers.

Edited June 20, 2018 by balthazar