Thursday, February 23, 2017
The jawbone of an ass
President Beetlefart has used a part of his time in office making grandiose promises about trade and tariffs and scaring the shit out of businesses. And they are scared because while other Presidents have made promises, this is the first time a stark staring lunatic has been in the White House with the support both houses of Congress in the hands of like minded lunatics.
President Trump has talked about border tariffs and new trade deals that many people in aerospace fear could raise the cost of American airplanes bought by foreign airlines or governments. And if Boeing’s sales or profits suffer, its nerve-system supply chain — more than 13,000 companies across the United States, and more than 1.5 million jobs — would most likely feel the pain, too. At SmartCells, 50 full-time employees and a few dozen temporary workers stamp out cushion pads on heavy machines. Executives work in a red building everyone calls the barn, and first names are the rule. Washington feels far away, but it is on just about everybody’s radar.Just one example of why business is fearful of a president who will speak about things of which he knows nothing and a Congress that will do anything to prove their rhetoric is valid.
“Let’s hit it with a two-by-four and see how it reacts, then get a plan,” said Bob Bishop, the chief operations officer at SmartCells, describing Mr. Trump’s hard-charging style. “That doesn’t always work.”
The anxiety, said Mr. Bishop, 46, a former deputy county sheriff who voted for Mr. Trump, centers not so much on politics as economics, specifically the intense competition with the French airplane maker Airbus, which competes toe to toe with Boeing for jet orders in countries around the world in a delicate game of narrow cost differences and giant contracts.
Mr. Trump has said he would seek a 45 percent tariff on imports from China, for example, to protect American jobs, and a 20 percent tariff on goods from Mexico. If business costs for Boeing go up as a result, the company — the nation’s single largest exporter by dollar volume — probably would not be able to raise prices on its airplanes to make up the difference, because then it would lose customers to Airbus. For workers and suppliers, the fallout could be brutal.
“We’ve got such a huge network here — anything that curtails exports hurts the entire supply chain,” said John Thornquist, the director of the aerospace office at the Washington State Department of Commerce. “We’re very vulnerable.”
Companies that sell to Boeing, or sell to other companies that build Boeing components, said that even predicting a trade war was risky, with so many variables — politics, economics, multiple countries — all in play. A modern commercial jetliner can have up to six million components that must be engineered and tested to safety standards, even before assembly starts.
“We’re trying to do our best due diligence to put together an assessment, but at this time, the best we can do is just monitor day by day,” said Maurizio Miozza, the vice president for development and strategic planning at Umbra Cuscinetti, an Italian company that makes precision parts for Boeing and that has about 100 employees north of Seattle. But, he added, “the picture is not rosy.”
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