From WXXI news.

This is connections.

I'm Evan Dawson.

Our connection this hour was made with the announcement of new tariffs.

Tariffs targeting any automobiles not made in the United States.

As NPR reports, Mexico, Japan and South Korea, along with Canada, account for about 75% of U.S. vehicle imports.

Beyond direct exports, Japanese and South Korean automakers also manufacture many of the vehicles in Mexico and Canada, but ultimately land in the American market, leaving them particularly exposed to the tariffs.

President Trump has made clear that he feels tariffs are an appropriate tool for three primary reasons.

The first is fairness.

The president wants a tit for tat approach to tariffs worldwide.

The second is raising revenue.

President Trump has said that tariffs can raise $100 billion this year.

And we should probably remember who pays the tariff.

But still the president says he believes it's a good revenue raising tool.

The third is to drive manufacturing back home.

The president said the tariffs will lead to a manufacturing boom in which American factories produce the majority of what we purchase and consume.

Today, at least mid-day auto stocks are plunging.

The New York Times reports and quoted Hildegard Muller, president of the German Automobile Association, who said this morning, quote, the new auto tariffs send a disastrous signal for free rules based trade.

We must convene talks to discuss a deal between the United States and Europe, end quote.

But the white House says that this time the tariffs will be permanent.

They take effect next week.

Nearly half of all vehicles sold in the United States are imported, as well as nearly 60% of the parts and vehicles assembled there.

The president got a big thumbs up from the UAW, the United Auto Workers, who have been making the case for tariffs for years as a way to bring jobs home.

UAW President Shawn Fein said last night, quote, we applaud the Trump administration for stepping up to end the free trade disaster that has devastated working class communities for decades.

Ending the race to the bottom in the auto industry starts with fixing our broken trade deals.

And the Trump administration has made history with its actions.

End quote.

Fein added that the tariffs won't be enough.

He says workers need a strong NLRB, better benefits and wages.

He wants more proof that this white House cares about all workers, not just the wealthiest Americans.

But as for the tariffs.

The UAW says so far, so good.

Meanwhile, you've probably seen headlines about how all of this could affect the prices of cars in the short term and mid-term.

The New York Times writes, quote, Cox Automotive, a research firm, estimates that tariffs would add $6,000 to the price of a car made in Mexico or Canada.

Two of the top exporters of vehicles to the United States affected models include the Toyota Tacoma pickup, gasoline and electric versions of the Chevy Equinox, and several models of Ram pickups.

Ram is owned by Stellantis, which also produces Dodge, Chrysler, and Fiat vehicles.

End quote.

But dealers will tell you that that's probably not happening right away.

There's ways that they're going to try to mitigate the tariffs, and there are certain dynamics that we should all understand here about how the car buying market is affected here.

So let's talk about all of this with our guest this hour.

Brad Mccreevy is president of the Rochester Automobile Dealers Association.

Welcome back to the program.

Pleasure to be with you again, Evan.

And Dan Maloney, president of the Rochester Area Labor Federation, president of the Rochester Labor Council, president of UAW local 1097.

Welcome back to you.

Thank you.

And happy Irish heritage Month.

Irish heritage.

Well, of course, thank you, Dan Maloney.

Of course.

You wearing green.

So Dan, let me start with you here.

I read a little bit of what John Thain said.

I'll read his full quote a little bit later in the hour here.

But from just from the the first glance of it, UAW is cheering this tariff move.

Are you cheering this tariff move?

Absolutely.

And as our president said, long overdue since he's quote unquote free trade laws have been in effect.

It's just been devastating to what they call the Rust Belt, right, throughout America.

And I believe Rochester is on the tail end of that Rust Belt.

we've just we've seen where we had Delco products down the street from Rochester products with 11,000 workers here in this city working for General Motors.

We're down to 600 in 1 factory now.

So, yeah, we need to end this.

And, this is one tool in the tool belt to fight against.

I believe the unfair trade practices.

All right there.

Foreign nations, they have their own sovereignty.

They make their own safety training rules, workers rights rules, all that.

That's great.

But when you try to dump on us using that low road economic tools that they have, right, we can fight back with tariffs is again one tool.

Well and then you're a dirt under the fingernails guy.

We've talked about this for years.

you're not always the biggest fan of economists.

Economists are not generally fans of tariffs.

They say this administration's making a mistake.

What would you say to the economists?

So I would like them to look at all sides of the ledger here.

Right.

How many millions of jobs went away when over two thirds of GDP is consumer spending and the consumer is broke?

What are you doing to our economy?

Right.

And again, at what cost?

At one time in this nation.

Right.

Slave labor was available.

That'll make things cheaper.

But you know what I mean.

What's the morally right thing to do here?

So we have certain standards in this nation.

Minimum wage laws.

There will be no slavery, no prison labor, no child labor.

We've legislated the bad old days out.

It still goes on in parts of Asia, right?

It still goes on in South America.

Maybe in Mexico.

So let's level the playing field for what we deem to be morally just and let's protect.

I like the America first policies with the economy now.

And is it a case where you think, okay, trade has free trade has led to lower prices in this country, but it doesn't matter if you don't have a job to pay those prices at the cost.

And the other thing is the lessons of history.

So besides the economic damage, what about national security?

We all know the lessons of history.

We'd all be speaking German if we could not produce them in World War Two, right?

The Nazis.

But we were able to do that by converting over mainly the auto industry.

Rosie the Riveter, Willow Run, the bomber plant.

There was a Ford plant bought out by GM, now closed.

Right.

We're having a layoff here in Rochester, New York.

They dual sourced our products to Mexico.

Now, under this new Trump administration, we're facing layoffs because of Mexico.

It's not right.

So the certain few people that one half of 1% get obscenely wealthy.

We need to look broader, look more at the total interest of Americans, our national security, our economic security.

You get people working their funding, all those programs like Social Security that grandma relies on.

So let's do the right thing here.

So UAW cheering these tariffs.

The Rochester automobile Dealers Association.

Where are you on the tariffs Brad Mccreevy.

Well, look, I mean, I think, generally no one's in favor of higher prices.

you know, autos right now are already, getting to the point where they have an affordability problem.

You know, the average new car right now is about $49,000.

The average car payment for an individual is over $700 a month.

Those are some big numbers.

And in many middle class people, that's out of reach for them.

So I hear everything Dan saying, and it's hard to disagree with with everything that he's just said.

And but, you know, from our perspective, our dealers, we're in the business of selling cars and manufacturing the manufacturers.

We work with.

And substantial increases like what potentially may come down the road, are going to be tough.

They're going to be tough to manage.

They're going to be tough on consumers.

And, our dealers likely are going to have to try to figure out a way to, at least in the beginning, try to offset some of it.

And in the end, try to figure out how to work in a new world.

if it were to continue.

I find it a lot more fun to disagree with Dan.

I'll just say that.

Okay.

Dan's a good gesture.

It's it's fun to argue with him.

No, I mean, listen, I understand both perspectives, and we're going to try to explore as best we can what we know about the tariffs.

Now, what dealers are going to do in the short and medium term and why some of that probably counteracts some of the headlines you're seeing.

So I've been seeing headlines, you know, expect, as I mentioned, the New York Times talked to Cox and they said expect 6KI Brad is we're going to talk in a moment about why dealers are going to work to make sure that that is not, the immediate effect or even the midterm effect, but we'll talk about that.

we are also going to talk about, realistically, what Dan sees as goals for employment, goals for production, what that looks like, if we are unsure, a lot more manufacturing.

So we're going to try to cover as much ground as we can.

And listeners, if you want to contribute to the conversation at 844295 talk, it's toll free.

84429582552636.

If you call from Rochester 2639994 or email the program connections@kci.org.

You can join the chat if you're watching on the Sky news YouTube channel.

Brad.

When it comes to prices, let's talk about what dealerships have in stock already, how that could impact prices, or how that helps maybe mitigate in short term some of the tariffs.

And then if, as the president says, this time it's permanent or if it sticks for a while, what that means in six months, nine months, 12 months, 18 months, what do you see?

So most dealers and this is a very general, statement to say most dealers new car inventory typically runs in the 60 to 75 day supply.

That's a normal supply for a new car dealer, meaning 2 to 2 and a half months of vehicles on the ground.

Obviously, those vehicles are here.

They're in stock today.

Those vehicles would be unaffected, by any potential change that might come down the road.

So if a consumer can go out and find a vehicle in inventory today, this wouldn't be an issue.

And they likely would be able to continue to shop for at least another couple of months.

if the tariffs do go into effect and we start to see that in the manufacturing process, I think a couple of things are likely to happen.

I think on the manufacturing level, the manufacturers have known this was potentially going to happen, for a while now.

So my, my hope and expectation is that they have done some stockpiling, of parts and so forth to try to offset, you know, some of that.

and secondly, they would look for ways to try to absorb some of that in their manufacturing capabilities, again, to try to offset some of that once the tariff situation has worked its way into the pipeline, where it's there, it's been there for months.

From the dealers perspective, it would be awfully hard for them to try to absorb that.

I mean, they they buy the car from the manufacturer.

There's a margin in there.

Dealers frequently discount that margin, but it's not.

We're not talking about a lot of money here.

and there's just not a lot of margins are pretty thin, is what you're saying in the in the despite what some people might think, you know, the margins in a, in a new car dealer are not that substantial.

Okay.

so a dealer wouldn't have a ton of room to try to absorb or offset, you know, some of a price increase, at their end, because there at the end of the I mean, the consumer's the ultimate buyer, but the dealers are at such a point in the, in the chain that it's pretty much established, you know, what's what's happening there.

And there's not a lot of there's not a lot of flexibility for them to be able to offset it.

Brad, is there any scenario where you see it is likely that take just for argument's sake, take a car that's got a 40 K price on it.

and it's affected by the tariffs.

It's a 25% tariff.

Is there any scenario where you see, well that that car is now just 50,000.

It's 25% more.

Or is it more likely to be sort of strategically, spread out in certain ways, or are we going to see sticker prices jump 25% at any point?

So look, do I see it being that simple?

No.

the auto industry, I mean, just look back at what's happened the last 20 years.

There's frequently cases where manufacturers come out with incentives, that are thousands of dollars, you know, on the hood of a vehicle.

that's that's commonplace today.

And we're not even in a situation where we have tariffs.

So, it's it's very common for manufacturers to subsidize the sale of new cars, either in the form of a rebate in the form of an interest rate subsidy, in the form of a lease incentive.

There's a number of different mechanisms that they can use to try to offset, you know, some of that price increase.

Having said that, it's not like they can absorb all of it or offset all of it, but there are some mechanisms in place that I think the manufacturers will be able to utilize that would offset some of that.

What's the timeline before you if the tariffs are fixed, if they're not going to be pulled off, what's the timeline there?

You would expect consumers locally to start seeing some of the effects of the tariffs.

So you know this is just not educational.

Guess on my part.

But it depends on what the manufacturers have done to build up, you know, their own stockpile.

of inventory, whether it's parts or vehicles and how much they can absorb and how long they can absorb it, when they when they reach the point where they can no longer absorb it and so forth, and it's made its way into the pipeline, then I think you're going to see something.

And, I mean, probably you're looking at maybe 3 or 4 months down the road, minimally, before we would likely see anything substantial in that.

So perhaps the summer?

Possibly.

Yeah.

Okay.

So Dan Maloney again, Dan is president, of the Rochester Area Labor Federation, president of Rochester Labor Council and UAW local 1097.

When Brad says nobody wants to see higher prices, I want to talk to you a little bit about prices, because realistically, if we're going to insure more manufacturing, whether that's this year, next year, over the next ten years, whatever the case may be.

is it inevitable that we'd see some prices go up?

And do you think that countervailing wages would would essentially cover that, or do you feel like, that that we would not there's any scenario where we wouldn't see prices rise as a result of all of this?

No.

I think there will be, short term.

Right.

And spike in prices as you get everything.

Richard, on short, however you want to word it.

Sure.

And remember, the price of a vehicle baked into that.

The cost of UAW labor, all American UAW labor, somewhere around 7%.

The cost of their vehicle make sometimes under depends on what you're building.

Right.

So that's not the make or break is bring.

Now it's the other things.

It's the regulations, the environmental standards that we have here.

And again, we have them for a reason.

Right?

We don't want to pollute our lakes and rivers and streams anymore.

We don't want to pollute the air and create, you know, asthma and other lung diseases among our population.

But somehow we don't care if they do that in Mexico.

That's fine.

It makes the car cheaper.

So why don't we just abuse those folks?

You know, it's just again, it's so immoral.

It's so wrong.

But another thing that we're missing here is nobody believes Trump.

So he's, you know, thumping his chest talking.

What do you mean he's talking about 25% tariffs.

I'm going to stand up I'm going to reassure the auto industry.

Well they know next week he'll probably pull that guy.

Yeah we're good.

And so the white House says this.

These are going to stick these are the permanent ones.

All right wait wait and see.

Right.

Jury's out because we've seen him already dancing around like this creating instability.

And the one thing the business community hates from what I read is instability.

They want to know what they're dealing with, get their arms around it and move forward.

Have a plan.

So if he's going to hold to the 25% tariffs, sure.

That could have the potential to bring back reopen factories.

All those people rebuilding machine tools.

Right.

you know, all the, factories that were leveled, the brownfields, rebuilding those construction trades, going to work.

It's going to be such a huge injection of money into the economy.

And those folks, they're good jobs.

They're going to be able to afford vehicles.

So will the price go up a little?

Sure.

But will it be offset with tax revenue in those higher wages?

Yes.

And again, is Trump stable enough to know what he's doing here or is he just playing games puffing up.

And he'll deflate next week.

That waits to be seen.

We'll get some of your feedback in just a moment.

I want to cover a couple of other points with our guests.

And, Brad mentioned the 49 K as the average cost of a car.

Now, because we've seen steady increases over time, is a lot of that driven by inflation in the last 3 or 4 years?

that but more, more just the, the, the, the technology that's built into vehicles now, the safety technology, the all the bells and whistles that you see in your vehicles right now and then the general rise in the cost of production of vehicles.

But you'll the inflation aspect that we've seen in the last few years, it was already moving in that direction.

It was probably a couple of years ago it was 45 plus.

So there's been a gradual increase in the in the price of a new car due to the content and all the things that go into a vehicle.

I mean, it's a mobile computer.

it's very sophisticated.

Very I mean, we talk about autonomous vehicles from time to time.

Many cars have a lot of the features that are autonomous.

It's still scares me, Brad, but yes.

Yeah, yeah.

And and for good reason.

But many of the cars that are out there right now already have a lot of that technology.

And that technology has a cost.

So I wouldn't necessarily attribute, a large part of the cost of vehicles to inflation.

I think it's maybe caused it to go up even a little bit higher, but it was already up there a few years ago.

So Dan mentioned regulations, environmental standards.

And as you said, you're not saying you don't want environmental standards.

But I want to ask you but I want to ask you a little bit about if there's even an imbalance there.

So here's what comes to mind for me.

First of all, I recently showed.

So I grew up in Cleveland, Cuyahoga River.

I just recently showed my son a picture of Cleveland the year that I was born is at 6979.

Excuse me.

Okay.

I was thinking the river on fire.

And so it is closer, right?

It's going to say you're much younger, so.

Damn.

But to your point, though, this is an aerial shot of Cleveland with the Cuyahoga River.

And he says to me, where's the water?

I said, you're looking at the water.

So what's orange said?

Yeah, this is the 6070s.

I mean, like the river caught on fire.

There was a it was a point of shame.

But the city, we were the laughingstock.

And, so nobody is saying and I don't hear you saying, well, that didn't matter.

Let's go back to that.

I don't hear you saying no, not at all.

But I'm also reading Ezra Klein and Derek Thompson's new book, Two Progressive Writers whose new book is called abundance, that we're going to talk more about next month.

And one of their big arguments is that we have gotten off balance with regulation, that in many blue cities and states, it's hard to build anything.

You can't even build solar installations in California.

You have to wait years.

And that's supposed to be good for the environment.

Do you think it's out of balance in this country?

Forget about Mexico, forget about China.

Is it are we overregulated on environmental standards here, or do you think we're where we should be?

Yeah, I think just wrongheaded decisions, right.

Solar and wind being two of them.

And we've had it should be a separate show.

I'm a big believer in nuclear power.

Right.

And it's such a scary word.

Nobody wants to invest.

We should have been investing.

And if we were to start properly regulating and building, I think to put one online now a nuclear power facility, it's almost 20 years.

Yeah, it's at least 1045, right?

Yeah.

Long time.

So now they have them new micro nukes and they're just exponentially safer.

And we're already we got we live next door to a nuclear power plant, the oldest continually operating nuclear facility in the north in North America here.

And it's safe.

Right.

And we wouldn't put our workers at risk.

So we need to get into the nuclear power business and stop propping up China with these solar panels and taking up our farmland, etc.

but again, that would be a show for another day.

And, you know, the hydrogen fuel cell vehicles is the way to go.

So you've been saying that for years.

And one alliance I think we can make with the dealers is this direct sale thing with Tesla.

We are so against it.

And I think Greg is playing for playing for the listeners.

Hear what you mean?

So he represents a dealer network Bob Johnson to the world.

Right.

The franchised dealer franchise.

And we have those franchise laws here in New York State.

So when I buy a car, right, I want to make sure that there's no shyster re a and when it's a sole provider like Tesla, you buy online like you don't know what he's doing behind the scenes.

The price in this right as he is, you know, over charging for different options.

You wouldn't know.

But at least with a dealer network I can go in, physically see, see what the vehicle's all about.

And I just ordered online.

Get it?

But more importantly, service after the sale, a brick and mortar location to go to.

Hey, that's making a rattling noise.

I just bought this thing.

Pop the hood and fix it.

That's what you get with the dealer network.

You don't have that with Tesla.

He third party licenses out some kind of support team.

I don't know, but we have legislation cooking in Albany that would say we'll talk bread, but what do you want to see happen?

Tesla, Lucid Motors, whoever else it is trying to sell directly, they need to have those brick and mortar, dealer networks, just like everybody else is required to do.

And Mercedes, you know, for GM, we all have to adhere to this law.

Why did he get in that?

he being Musk get an exemption from the law.

Okay.

Anything you want to add to that, Brad?

Yeah, only that obviously I do represent the franchise.

New car dealers in the area and and we're big advocates of the franchise model.

The franchise model has been around for well over 100 years.

We think it's the most efficient, most consumer friendly, provides the consumer with the best service.

And, we just believe that and, the model of direct selling, you know, by a manufacturer and what that represents to a consumer, we think is a disservice to the consumer, especially, as Dan mentioned, on the after sale side of it.

and all of these companies, by the way, are electric vehicle companies.

They're there aren't any companies trying to sell directly that sell internal combustion engine vehicles.

So this is something new to the industry.

But we've we've been dealing with it for quite some time now.

And yeah, we, we we don't believe that that's the best model for consumers.

Dennis Reed I don't see you rolling around town on what is that called, a Cybertruck?

That blocky thing.

Yeah.

No, no, not a thing.

Not a thing.

Okay.

but the other thing, I want to make sure I asked you about Dan, because when you talk about your hope that these tariffs that the UAW supports is going to bring back manufacturing, that we're going to make more cars here.

Again, let me read from a story today from journalist Andy Lowry.

She says tariffs can not necessarily recreate the job environment from the 50s and 60s.

Here's what she says.

Quote, when companies build plants in the United States today, they look nothing like the Manhattan garment factories and big three assembly lines of yore.

Automation has diminished the number of manufacturing positions globally.

Countries such as Ethiopia and Bangladesh have seen most of their job growth moved to the service sector.

Given the high cost of labor in the United States, manufacturing firms tend to invest heavily in robotics, machine tools, and AI systems.

In the 1930s, the biggest Detroit auto plant employed more than 100,000 workers.

Hyundais new electric vehicle plant outside Savannah is expected to employ 8500.

End quote.

So do you.

Her analysis here is even if we are unsure again, it's not apples to apples.

We're not going to employ as many.

So we're going to there's been a technology shift.

So we're going to take a hit with higher prices.

But we're not going to employ as many people.

Is that is that correct in your view.

Yeah.

Again I don't see it.

Are wages account for as I said, about 7% of a finished product.

They're finished vehicle.

And you know, depending what you do with benefits, like if we went to a single payer universal health care system, you could take that off the backs of these, manufacturers as well.

One thing I know, it's an old axiom.

You either grow it, you mine it, or you manufacture it, or you're a third world nation, right?

If you want to be a first world industrial power, economic might, right, you have to build it.

And by far, manufacturing is the king of those three due to the supply chain.

So these tariffs include also you know, the the mufflers, the tires, the hubcaps, the radios, all the electronics that Brad was speaking about going to these, you know, the problem we had with chips, that's why we have that chips bill trying to onshore electronics again into this country.

We again put ourselves at risk economically and militarily.

People aren't nice out there.

We see what Putin's doing to Ukraine.

We see China flexing their muscle in, in the, Asian seas, right, against some of our allies like Japan and Australia.

So we need to be prepared, whether you like it or not, to reality is if you don't build things, somebody is going to own you and you'll be in poverty eventually.

We've been playing this game where again, the half of 1% are getting obscenely wealthy by offshoring these manufacturing jobs, but it's to our detriment as a nation.

Our security has been severely diminished.

So we should be in control of our own manufacturing base, which again, it's so broad with the mining, the engineering, that's another thing, right?

The next generation comes out of manufacturing.

Where did those kids go when they get out of college?

Where do those engineers go?

Why do you think Asia's exponentially booming with engineers?

We're not right.

We're in decline in manufacturing, and they're growing it.

We need to get that back for a lot of reason.

So when you say the tariffs include the mufflers, all these other part, you're saying that's a good thing.

They should.

That's a great thing.

So then you know the ores coming out of the ground.

They're going to those metal factories the smelting then the raw steel of the stamping plants, then the wiring, the wiring harnesses, all that stuff that's currently made in Mexico that comes back.

That's technology.

We need to go along with those chips and computer screens in the vehicles.

So I've got one more question before we break and turn it over to listeners, I just want to ask you what is a timeline that's realistic now?

Because when we talk about on shoring again, you know, I don't know.

It's a big investor.

I don't know if we're retrofitting old plants, I don't know for building everything from new, maybe a little bit of off off all the above.

So we're used to it in the auto industry.

We retool every year, right, with the new model.

So there's new equipment constantly coming into our plant.

And again it's about 7 to 1 for every one of us auto workers.

There's seven other people working and they're saying hire.

Now some new studies.

I got 8 or 9 people working for every one of us.

So and here locally again, a lot of little job shops that make those molds, dice machine, tool building, they're going to work every day punching that clock, getting a good, you know, living and putting money back into the tax base that pays for cops, firefighters and teachers, things that we need.

Bread.

Yeah.

You know, I mean, again, Dan's right from the standpoint of the labor side of the equation.

But I think it's important to understand in the auto industry where do all these manufacturing jobs go?

If you look at where the auto manufacturing business takes place in this country, it's in the southeast of the country.

Why?

Because the labor rates down there are on the federal minimum wage standard.

Not to suggest that manufacturing jobs are at minimum wage, but you have a wage scale that starts at the federal wage of seven and a quarter, and it works its way up from there.

New York being the second highest minimum wage state in the country, behind California.

We're at $15.50 in this country or in this state.

And so you already have a higher wage scale, and it's going to go up from there.

That's why you don't see a lot of manufacturing in the auto industry coming to New York.

You don't see it coming to Michigan because they're higher.

Ohio, the places that Dan referred to in the old days that were the Rust Belt, those states have wage scales that are higher than what they can find in other parts of the country.

So even within our own country, they'll find that wage.

You bet.

They're going to find a place to go to make the labor costs as low as they can make it, because if I'm the CEO of General Motors, Ford and Stellantis, if I don't find a way to maximize the shareholders value, I'm not the CEO anymore.

they're going to find ways to manage this labor costs.

And frankly, he threw a number out the 7% number.

I didn't frankly know that.

I thought it was higher.

So interesting to know that I'll try to fact check it.

Yeah, but you always do.

But they're going to they're going to look for ways to, to manage that labor costs to the best that they can within the United States if that's what they're forced to do.

So Dan, what do you make of that?

So I mean, do you think Brad's right?

I mean, he's talking about they're going to go with the labor is cheaper.

Yes Mississippi is our Mexico.

Yes.

So I think it was one hand Savannah I mean like southeast right in Georgia, South Carolina, South Carolina, Alabama, Mississippi, all those states.

So how does that help New York State?

How does that help Michigan?

How does that help Ohio?

Well, again, the fights here then.

And under if it's a staffed National Labor Relations Board, that's on us to go organize those plants and bring worker justice down south so that the folks don't need to move from New York.

And an advantage we have here is clean water and hydroelectric, cheap hydroelectric energy for our plants, the ones in western New York.

It's automatic.

They're so close to Niagara Falls.

here in Rochester, we have to do a little more negotiations to get a piece of that cheap hydroelectric power.

But again, the clean water here, a skilled workforce, the colleges here that keeps us in the mix.

And again, a handy plan, I believe it was was busted with 13 year old workers in.

I believe it was Mississippi.

So fact check that for me.

Let me know.

But, and it was recently.

I'm telling you, you're wrong.

I'm saying that I just I that's this is America.

And that's what happens when race to the bottom economics.

Right.

So we can't allow that.

But that is on labor to go down there and organize these plants like we did with Volkswagen in Tennessee.

So if you're just joining us, we're talking about the possible effects of the new auto tariffs that the white House says go into effect next week.

And they say this time they're permanent.

Now UAW is Dan Maloney is saying they better be permanent.

Like this back and forth doesn't do anybody any good.

It's a lot of uncertainty.

The business community does not like uncertainty.

Markets don't like uncertainty.

They'd like to at least know what to prepare for.

So Dan saying if you're going to do it, let's do it.

And then the hope that the UAW has and that labor leaders like Dan Maloney have, is that this will eventually bring manufacturing back here.

And then if, as Brad Mccreevy points out, it becomes a while, the labor disperses to the cheapest wage states.

Then Dan says, okay, now we're fighting here.

Now we're fighting for wages here.

Now we're not battling other countries for it.

We are going to try to, you know, create equilibrium here.

So that's what Dan's looking at.

Although I didn't hear you say, is it this year.

Is it next year.

What are we going to see this.

These plants come back here.

When do you think so again.

They have to be able to trust what the president's doing here.

His policy.

So they need to see consistency up I think it's got to be in place for a matter of years.

And they're big investments.

You know, these are billion dollar investments when you're trying to rebuild a factory.

So realistically, it's not in 2025, maybe before the end of this term we start to see more manufacturing happening.

Yeah.

Maybe so.

And it's not just the tariffs.

And again we spoke on a previous show.

It's got to be targeted tariffs only to those that are bad actors or countries.

I don't get this thing with Canada right there.

Our friends.

They have similar labor standards.

They're an ally.

I mean, there may be a case to tariff one product or some of the agricultural dairy.

We were talking about dairy, and we got a ton of dairy farmers here in New York.

Sure.

You know, if they're not playing nice in that, just that one, this across the board tariff, 25%, you know, on on a country is wrong.

So hopefully we a little more surgical than a sledgehammer as you said an okay ruscio let's let's do it right.

But Dan saying if this happens maybe by the end of this term or maybe by the end of President Trump's third term, we would see you see what I did.

Yeah.

Sorry, Brad saw the two.

And where's Brad Mccreevy, who's president of the Rochester Automobile Dealers Association, is saying he understands the argument.

But realistically, margins are pretty tight now.

And you're going to see dealers absorb tariffs as best they can.

You're not going to see prices swing upwards 25% next week.

But by the middle of summer, by the fall, by the winter, if these tariffs stick, we could see an upward creep in prices.

Probably not in big chunks of 25%, probably dispersed a little bit more.

But but undoubtedly dealers can't forever just absorb the tariffs.

Yeah.

And again I think the ability for dealers to absorb much of it at all is is very limited.

the more likely scenario is manufacturers will use selectively target incentive money, which they already do, and they've done that for years to try to manage, those costs increases, and, and provide incentives to consumers, which is a common practice these days.

So I see that, dealers have very limited flexibility in their pricing structure.

It just doesn't have huge margins in their, that they can afford to absorb a lot.

so, you know, to Dan's, comment about Canada, I mean, my my take on that is I think the auto industry in Canada is a very significant industry.

I did some, you know, quick checking.

You know, they have over 94 businesses that are in the auto industry.

It's a multibillion dollar business for them.

They employ 117,000 people.

And my expectation is that he targeted your own industry because it it's it it's meaningful to them.

And he's using it as an offset to say, look, we want we want the tariff situation on our on our, our agricultural products should be lifted.

And in exchange for that, we'll, we'll consider backing down on the auto industry.

But the auto industry is very substantial in Canada.

And he's he's attacking, I think, an area that's meaningful to them.

All right.

Let's get our only break of the hour.

And your feedback on the other side of this only break.

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Tomorrow is his last day.

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This is connections I'm Evan Dawson.

All right.

Let me get some feedback from listeners.

Greg wanted to know, are some car brands more effective than, more affected than others by the tariffs?

so let's start with that.

Brad Mccreevy.

So I look I haven't seen a list of, of the brands and what the tariffs are going to be.

I mean, he's made very clearly that Mexico and Canada and I believe the Korean carmakers are being targeted with a 25% increase.

I don't know where it stands with respect to the European countries, Japan and so forth.

again, I think it depends on what the, the trade situation is with them.

I mean, he's talked about reciprocal tariffs that's been thrown around a lot.

And so if the reciprocal tariff in Europe is, let's say, a 10% that tax, you know, or a 15% that a value added tax, then he's talked about saying, okay, then we're going to implement a 15% tariff, and a reciprocal amount of money.

So I haven't seen the list yet in terms of what those tariffs are going to be.

But I think there's going to be some differing numbers.

Okay.

part of what I'm inferring from Greg's question is, are there some cars that are made in the USA, more made in the USA that you're nodding over there?

Dan Yeah, it's to my shame because I work for, Chevrolet.

But Ford is the most American, so I would think they would be least affected.

Right.

And then us and then Stellantis.

God knows where they're at these days.

They have a deep supply chain throughout the world.

So but I would say Ford is probably the least effective than General Motors.

Okay.

Yeah.

But but virtually, I mean, I might be going out on a limb and saying there's almost every manufacturer in the auto industry has a plant in the US somewhere.

I mean, when you go to the southeast, Hyundai, Kia, BMW, Toyota, Honda, they all have manufacturing facilities in this country.

And, and so there is the opportunity to to offset some of those by simply shifting manufacturing capabilities to this country.

And those plants may be operating with, with excess capacity that they have to absorb it.

Okay.

listener on YouTube, in the YouTube chat said outsourcing labor to southern states doesn't sound great when you say it out loud.

There are four hydro plants along the Genesee we could retrofit.

Mount Morris already has generators.

What do you think, Dan Maloney yep.

And after that, for quite some time, as well.

And then in the off peak hours we can create hydrogen with those same hydroelectric facilities along the Genesee River.

I like where he's going with this.

Yeah.

All I would say is, you know, purely looking at the wage scale, if you just start there and you look at what's happened in this country, if you look at the southeast, it is absolutely the place where the manufacturing is happening right now.

But, as far as the New York area and the Rochester, that's why you have organizations like GRI and the chamber and other types of organizations that work with potential companies coming to this area and setting up shop.

And that's why those people do what they do.

All right.

Well, we'll see.

Thank you for that comment.

Let me get Charlie in.

Seneca Falls on the phone.

Hello, Charlie.

Go ahead.

Did I hit the wrong one?

Hello.

There you are, Charlie.

Go ahead.

Okay, so, two comment prices are a box of cereal that I've been buying for years.

Went up a month and a half in the beginning of Covid.

Yeah.

It's not come down.

Wheat prices to the local farmers in the county are below the cost of production.

So yeah, the prices are up for a little bit for the Trump tariffs.

When they go up, they won't come back down very quickly.

Over half of the comments though.

Who's the manufacturing operations around here for decades.

And you don't build an auto plant.

You don't need to move production from Mexico to the southeast or the northeast in less than a 2 or 3 year time.

And unless you're building duplicate products now, Trump will be out of office.

We hope before any of those new production facilities would come obsolete.

okay.

Charlie, a couple points.

Let's work backwards here.

I think Dan Maloney doesn't disagree that we're not talking this year for reshoring manufacturing.

No, but I do remember around 2006, we moved a factory from Michigan to Rochester inside of our plant, the facility within a facility, brand new build ground up, and it was six months operational.

We can move in again world War two when you want to move and you got the resources, you can build something.

Man it you know, staff it up in six months.

Yeah.

I think we Charlie might be suggesting is building from the ground up.

In the ground up is a very, very substantial investment.

It's a substantial development.

Yeah.

I mean if you again if you go down and look at some of these plants that are being developed over time, it takes a number of years to get something built and up and running.

I'd say you're looking at a minimum of three, and you might be looking at somewhere in the 4 to 5 range to again, start from scratch and get up into a fully productive production facility.

His other point was on the stickiness of prices, and I'm going to try to remember what economists on this program have told us about stickiness of prices.

that's actually a term that economists like, which just describes, sometimes when we talked about inflation in the last few years, there was this assumption that, well, when inflation comes down, prices will fall commensurately.

And there are certain sectors of goods and services where prices do tend to be more sticky.

Food is one of them.

I mean, the price of eggs is coming down, but that's because it was at a level of I mean, people weren't buying at eggs, whereas when we see incremental increases, Charlie mentioned boxes of cereal.

Food prices do tend to be stickier.

So even if inflation falls, or economic conditions change, you might see the prices stick.

I don't know where automobiles are in that bread.

I mean, how sticky are car prices?

Well, and one thing I would say to Charlie, he might want to consider switching cereals.

He could probably find one that's less expensive.

the one great thing about the auto industry, and this is absolutely one of the best things about it.

It is extremely competitive.

I mean, hyper competitive.

Any manufacturer that pulls back or, doesn't try to fill a niche in the market.

Someone else is going to get in there and do it.

And if they have a pricing situation where they're trying to hold, a margin on, on a particular vehicle and someone other manufacturers sees an opportunity, they're going to get in there and they're going to try to grab market share.

So it's a hyper competitive business.

manufacturers are constantly looking to grab greater market share.

And for that reason, I think you use you have the benefit of of the let's just call it the best pricing you can find.

It may not be as low as you want it to be, but it will it will be competitive.

The point I think Charlie is getting at is if we see these tariffs stick around for six, nine months from now, we do see prices rise and then the tariffs go away in 18 months.

Could prices come back down?

Brad.

and I think the answer to that is yes because the manufacturers because they have a constant goal of grabbing market share and producing vehicles and growing sales, there's a constant push to try to move that number.

And that's what drives the pricing to be more competitive.

So we'll see.

And I understand why Charlie Dan Maloney have been talking about tariffs on tariffs off.

But again the UAW is challenging this white House to say you're going to do it.

Do it do it right.

Stick to it.

Amen.

Don't don't pull back from it.

Yeah.

The benefits I think far outweigh the cost on this.

And again but do it smart.

Do it right.

Back off on Canada.

Full steam ahead on China Mexico.

Anybody that doesn't treat their workers right and and have the same standards that we do again with you.

But it sounds like you also want to be patient and say don't expect manufacturing to be back in six months.

Give it the appropriate amount of time to restore your manufacturing.

Yeah.

Again, you said it.

Investors.

They're not going to play this game.

They're going to wait and see.

And if it looks like well I guess it's here to stay.

So let's build in Mississippi.

You know let's bring let's let's turn on the Toyota factory that's already here and, you know, ramp it up.

But I don't disagree that so far the signals from this white House on tariffs have not been consistent, not at all.

Yeah.

Okay.

We'll see.

let me get Pete in the Finger Lakes next.

Hey, Pete.

Go ahead.

Good afternoon.

First, a little reminder.

Manufacturing was moved from the northern states to the southern states before it was moved to the Dora program in Mexico in the late 70s, I worked at Delco Products.

I challenged the leadership of organized labor, and that's all I was told was, don't worry about it.

We got plenty of jobs.

Don't worry about it, okay?

Now we're in the now we're in the position of trying to bring these manufacturing jobs back.

Dan, you said something about the cost of vehicles.

Well, let's take a look at the level of technology incorporated in production.

is it really necessary to live electric everything in this?

Before we get into the the question of the amount of control that can be exercised on these vehicles, the, I was reminded back years ago there was a, a reporter, Oh, geez, I forget I'm forgetting his name.

He, Richard Clark, one of the, is one of the, government officials.

Back during 911, he was the only government official that apologized to the American people, that the government.

And he failed us because of 911.

And he made a comment about this, this journalist, Michael Hastings, who, seemed to have lost control of his new Mercedes.

And he said, Richard Clarke said, if you don't think the government has the ability to hack into a vehicle, you're fooling yourself.

So, let's discuss that.

The, the fact that, organized labor was def and complied with this outsourcing of, manufacturing back in the 70s and, reducing the level of technology incorporated into the production.

But, Pete, do you think computers are in cars now so other people can control them against our will?

Let's put it this way, whether you want to believe it or not, they can.

And Richard Clarke said so.

And he's not alone.

Yeah.

So let me just jump in because you've given us a lot here, and I'm running out of time, and I want to work in, some other callers and listeners.

But on that last part, I mean, Brad, I said earlier, autonomous vehicles scare me.

I don't suspect someone is going to use a satellite to try to crash my car.

there have been times where people have a stuck brake and they're trying to get somebody to intervene from outside.

And, you know, there've been unfortunately very rare, but some tragic cases.

But, any concern that you have about that being a regular problem?

look, I mean, there is a lot of technology in cars.

There has been some concern about people able to hack in, to, on board diagnostic and on board communications.

you know, one of the positive aspects of this, our good friends at Tesla.

Okay, they have a lot of, repair activity that takes place on what's called over-the-air updates.

They have a technology that's a problem with the car.

They threw a over the air update to the vehicle.

They can fix the problem, and the consumer doesn't have to go in to a facility and have it done.

now that's an electrical problem.

It's a computer problem.

And they're able to to address it.

And other manufacturers can do the same thing.

Like many things, there's good and bad.

There's good parts to it.

And there's some concerns that need to be managed.

so his point of could someone hack into a vehicle?

There is some possibility that that could happen.

And that's part of it needs to be managed.

And Dan, what about his other point about what happened in the 70s?

Man, you're you're right.

They were asleep at the switch I think leadership they were barking but not loud enough.

And they weren't getting the community support on their side.

It was kind of their death by a thousand.

you know, needles thing.

It was just they were slowly attracting people out of an existing workforce for a long time over a period of, you know, throughout the late 70s, the 80s, and then here and there, a plant closes and it just kept ramping up.

And by the time, you know, you started really barking, it was too late, right?

We'd already kind of lost the game.

And the other thing, it certainly is scary.

I don't I'm not a fan of this drive by wire and all that.

Solar flares, glitches.

You see it with all your electronic devices in your home, but when you're going down the highway at 65 miles an hour and something glitches, it could be really tragic.

Real quick Pat right to say car dealerships in the franchise model, the direct to customer model might be great for the customer, and I'm guilty of preferring to buy online because of its ease.

But it reduces jobs in the area and it contributes to the consolidation of wealth via vertical integration.

That's Pat.

What do you think?

Brad?

Yeah, I think that's a fair statement.

I mean, look, I say all the time buying a car is is pretty easy, quite frankly.

I mean, if I, if I set you up and you went into a dealership and you knew what you wanted and it was all agreed upon everything, you could probably buy a car in an hour or two.

Okay.

Not not a hard thing to do.

The after purchase service that a dealer provides to a customer is what the difference is all about.

And direct selling and direct to consumer models fail in that regard.

I'm not going to say they don't do anything to service vehicles because they do, but it's not on the level that a franchised dealer does.

They don't value the customer the same way, and they're not there to provide the level of service that customers are accustomed to, whether it's warranty work, whether it's trading in your used car, whether it's dealing with, you know, problems mechanically with the vehicle and, or just generally being there to help, with the customer, the franchise dealer model is superior to, to that model.

And lastly here, Jane says the Rust Belt developed in part because companies want a more profit, lower cost, lower cost of labor.

Those profit motives are still in place.

That's what Jane says.

Correct.

And this is what the tariffs can help.

It is the greed motive.

That's like you said, corporations are out to make money.

They'll squeeze it wherever they can.

They don't care about morality.

And, you know, the low road economics at their.

Well, they said they've got an obligation to shareholders.

That's what they're saying.

But you know, so our nation.

Right.

Or the folks in charge in Washington should be able to control that greed element, right.

When it runs amok and ruins the nation, they should be able to pull the reins a little bit and bring it back.

And that's what long term tariffs against bad actors can do if these tariffs get shelved.

Come back here.

And I would love to hear what you're thinking on that day Dan Maloney.

But absolutely in the Me because Brad and Dan will have different views on the day they're shelved.

But for now, the white House is saying there has been a lot of back and forth on tariffs.

Not this time.

They're saying starting next week these tariffs are permanent 25% tariffs on imported autos.

But we'll see.

And I want to thank our guests for making time for the program Brad Mccreevy is president of the Rochester Automobile Dealers Association.

Thank you for being here.

It's my pleasure, Evan.

Thanks to Dan Maloney, president of the Rochester Area Labor Federation Labor Council, and president of UAW local 1097.

Thank you, sir.

My pleasure.

Great to see both of you and more connections coming back in just a moment.

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