Detroit. We should probably be used to this by now, after all, the industrial Midwest has always been part of the vast “flyover” states that no one in Washington seems to care about, except when it benefits them somehow.

 

I distinctly remember Mitch McConnell coming to Detroit, hat-in-hand, courting big-time donors from the auto industry for help with his campaign funding. The reception and dinner were held at a fancy restaurant downtown, which no longer exists. This was back before the bankruptcies and the Senate hearings that famously took Detroit auto executives to task… for being, well, from Detroit.

 

And then, not surprisingly, McConnell was one of the grandstanding ringleaders during those Senate hearings heaping derision on Detroit and everything associated with it.

 

Shocking? Not if you had been paying attention. I wrote about the anti-Detroit mindset and bias extensively in my book Witch Hunt. Detroit has been the political punching bag for stumblebum Washington politicians for decades. The last time Detroit and the Detroit automakers were given serious respect was in World War II, when the entire auto industry converted their manufacturing might for the war effort.

 

How all-encompassing was this effort? According to the National WWII Museum:

 

“By the time the Japanese surrendered in 1945, the United States had fulfilled President Roosevelt’s admonition to become the great arsenal of democracy. American manufacturers had turned out more than 96,000 bombers, 86,000 tanks, 2.4 million trucks, 6.5 million rifles, and billions of dollars’ worth of supplies to equip a truly global fighting force while maintaining a robust Home Front as well. The effects of this colossal effort far outlasted the war itself. Rather than returning to its depressed prewar state, the national economy added some 20 million new jobs over the next quarter century, doubling the size of the middle class.”

 

During World War II, for instance, the Willow Run manufacturing plant, owned by the Ford Motor Company, primarily produced the B-24 Liberator heavy bomber aircraft, becoming renowned for its massive scale and ability to produce nearly one bomber per hour at its peak production, significantly contributing to the Allied war effort by churning out a large volume of aircraft using mass production techniques typical of the automotive industry. At its peak monthly production, in April 1944, Willow Run produced 428 B-24s with highest production listed as 100 completed bombers flying away from Willow Run between April 24 and April 26, 1944. By 1945, Ford produced 70% of the B-24s in two nine-hour shifts.

 

Yes, I know, a different time and a different era. But it really was the last time that anything associated with the Detroit automobile industry was universally recognized and praised.

 

Since then, it has been a cadence of recitation of Detroit’s failures. We’ve seen it and heard it all: Detroit builds crappy cars; Detroit builds unsafe cars; Detroit can’t compete; Detroit suffers from chronic mismanagement (unfortunately too often true); and the most recent assessment, the Detroit automakers are so ineffective and inefficient they should just get it over with and go ahead and die. In short, Detroit has been this country's convenient whipping boy for all offenses - both real and imagined - for decades.

 

That last statement is popular with Muskolytes and other Silicon Valley trolls, and it’s now popular with the frighteningly incompetent politicians in Washington too. The proposed 25 percent “Trump” tariffs on all goods imported to the U.S. from Canada and Mexico are planned to go into effect on Tuesday, March 4. The tariffs are proposed because of illegal drugs coming in to the U.S. from those countries. As if that will have any bearing on that situation. It’s just a ridiculous logic, but ridiculous is Washington’s middle name.

 

These tariffs will decimate the U.S. auto industry, or, to be more specific, it will ruin Detroit. Why? As Todd Spangler of the Detroit Free Press reported:

“The reason is the overwhelming amount of motor vehicles and motor vehicle parts that crisscross the borders of all three countries as part of an interlinked supply chain that American automakers, including Michigan-based Ford, General Motors and Stellantis, rely on. As of 2023, census data shows Mexican motor vehicle and motor vehicle parts exports to Michigan had a value of nearly $60 billion; Canada's were about half that amount.

If those components and their finished products were subject to tariffs each time they crossed the border, it could have a huge impact, adding as much as $9,000 or more to the cost of a vehicle, analyst Patrick Anderson, CEO of Michigan-based Anderson Economic Group, said last week. That, in turn, could tank sales, creating a ripple effect throughout Michigan's economy.”

Or, in layman’s term: No shit.

Remarkably enough, GM CFO Paul Jacobson has said GM can manage the effects of short-term tariffs without needing a lot of capital or construction, with his emphasis being on “short-term.” But talk to anybody else of consequence in this business, from CEOs to major suppliers, and Jacobson’s statement was portrayed as being wildly premature and shortsighted. Or, as I like to describe it: It’s unmitigated bullshit. Unless Jacobson has a crystal ball, or he can guess the current occupant of the oval office’s next move, he just destroyed his credibility in one fell swoop.

There’s a strong faction in Washington that believes these tariffs are just a negotiating tactic, and that they will be short-lived and inconsequential. But as we’ve seen with this administration’s moves already, the wild pendulum shifts are wrecking what little stability this nation’s economy had.

And the tariff “tactic” will wreck Detroit for months, if not years, to come. Don’t believe me? Cars and trucks are already ridiculously expensive. The average price of a vehicle is now around $50,000. Think about that for a moment. That’s the average. 

And these tariffs directed at Canada and Mexico, which are being put into effect literally on a whim, will, let me say it again, destroy Detroit.

The U.S. auto industry, aka “Detroit” has been an essential part of the industrial fabric of this nation, whether the “intelligentsia” (cough, hack) in Washington, Silicon Valley and now, Texas, want to believe it or not.

Wait a minute, that’s giving these “brilliant morons” the benefit of the doubt.

The sad reality is that they literally don’t give a shit.

And that’s the High-Octane Truth for this week.