The White House Is Learning You Can’t Do All Of Your Policies At Once

I wasn’t going to write about the Hyundai drama again in The Morning Dump this week, but I can’t help it. There’s just so much there to think about in the context of the larger policy goals of this administration.

The last time a White House disrupted this many norms, it was actually another wealthy New Yorker in the White House. The biggest difference might be that FDR inherited urgent twin emergencies (the rise of Germany and the Great Depression), and President Trump, arguably, is making emergencies out of some very real (immigration, manufacturing decline), but probably less exigent issues.

What the Hyundai raid revealed was that trying all of your policies simultaneously can have negative consequences. Initially, the “success” of the raid in finding individuals violating immigration rules was heralded as a big achievement for the administration.

Now, with the plant being delayed, it seems to be butting up against the President’s goal to bring more production and investment here. The bigger risk might be beyond our borders. The President has long held the position that we need to counter China, which is fairly bipartisan as positions go, but what if this pushes more of the country’s allies into deals with Chinese companies?

I usually end the week on an up note, but I’m going to end it on an icky one. Be prepared.

Maybe Building Advanced Plants In The United States Isn’t A Great Idea For Everyone

The Hyundai Metaplant battery facility outside of Savannah, Georgia, was supposed to be a huge win for local politicians–mostly Republican ones–even though it had its roots in a policy from a Democratic President.

I think when we look at what the Biden White House did and compare it to the Trump White House, the ambition wasn’t that much different in scale, but the timing was. For all the talk of ICE bans and the like, the Inflation Reduction Act was relatively gradual, offering both incentives for construction and penalties for avoidance, but both over a long scale.

The Trump Administration is, constitutionally, limited to a single term, and seems to be doing the full Michelle Yeoh. Sometimes, this works. Our institutions are sclerotic at best and incapable of making change at worst. Being able to ignore norms to try everything isn’t always bad, and there’s an argument to be made that FDR also pushed as far as he could within the then-contemporary understanding of executive branch power.

And sometimes priorities clash. This is what happened at the Hyundai-LGES Metaplant site last week. The goal of restricting immigration (both illegal and, in some parts of the Republican Party, legal immigration) and arresting enough people to fulfill a quota crashed headfirst into the goal of encouraging advanced production in the United States.

It’s important to point out that this raid didn’t wasn’t focused on people who crossed a border illegally with the intention to stay, but workers who were essentially invited here by Georgia’s leadership (which is Republican, btw) to help set up this plant, as NBC points out:

Most of the detained South Koreans either were engineers or they worked in after-sales services and installation, said Charles Kuck, an Atlanta-based immigration attorney who is representing at least seven of them. He said they were in the U.S. under various visa programs that South Koreans and other foreign nationals have long used to do business in the country in the face of U.S. bureaucratic delays and murky regulations.

Sarah Park, president of the Korean American Coalition, said Monday that the detained workers should not be blamed for the challenges companies face trying to secure the proper U.S. visas for employees who are key to getting new facilities up and running.]

What’s somewhat curious here is that the President’s own environmental policies were making an already flattening EV adoption curve that much flatter. America, at some level, wants battery plants, but if you’re not actively encouraging EV adoption, the investment is a bit more questionable.

This raid made it that much more of a tough sell (not to mention increased steel and aluminum costs and other tariff-related cost challenges). The White House has been in backtrack mode, and there is a move from South Korea to get Congress to approve more of the kinds of visas necessary to get these plants built.

But that’s its own problem. These types of advanced plants require specialized workers to install certain equipment, and few of those workers exist here. The goal from the Biden White House was to encourage more battery production here so Americans can get the training, but that doesn’t work as well if you’re arresting the people doing the training .

That’s the point The Washington Post is making in a story about how this threatens to derail President Trump’s industrial policy:

Building plants to manufacture the batteries and related computing chips for electric cars requires very specific technical knowledge, according to Ellen Hughes-Cromwick, former chief global economist at Ford Motor Co.

“You have certain positions that are very, very technical,” said Hughes-Cromwick, now a senior visiting fellow at the center-left think tank Third Way. “These are people who have installed the equipment before. … It’s really ludicrous to think that we’re not going to have foreign-born workers as part of our workforce as we get manufacturing back on our soil.”

Battery plants require electromechanical processes that are far more complex than those at traditional car assembly plants, with proprietary industrial systems that most U.S. workers are not trained to operate. The engineers designing and building the plant need to have deep experience controlling potential contaminants, mixing volatile chemicals, and installing equipment that can handle voltage loads exponentially higher than those at legacy factories.

If you were curious, Hyundai CEO Jose Muñoz is saying that this will delay the plant by months. This isn’t necessarily going to discourage Hyundai, which is already too far along, but it’s a warning to anyone else who wants to build a plant like this here.

Congress is capable of correcting this issue by issuing more visas, but not all of the Republican Party is currently on board with this idea.

The United States Has A Friend In Mexico, Maybe

I generally think that Mexican President Claudia Sheinbaum has done a decent job of handling the back-and-forth with the Trump White House, and that includes siding with the United States on tariffs with Asian nations.

How is China taking that news? They’re not super pumped about it, according to Bloomberg:

China urged Mexico to “think twice” before levying tariffs, a warning that could signal Beijing’s willingness to retaliate over a move it sees as giving into demands from the US.

“Any unilateral tariff increase by Mexico, even within the framework of WTO rules, would be seen as appeasement and compromise toward unilateral bullying,” a spokesperson for the Ministry of Commerce said in a statement on Thursday. “We urge the Mexican side to exercise extreme caution and consider carefully before taking any actions.”

If you’re between a rock and a hard place, and that hard place is thousands of miles across an ocean and the rock defines your northern border, I think you go with the rock.

There’s something that Stellantis CEO Antonio Filosa said this week that also makes me believe Mexico is on the right track here:

The company, which has a large manufacturing footprint in the U.S., as well as in Mexico and Canada, is holding a “very productive exchange of ideas” with President Donald Trump’s administration, Filosa said in a Sept. 11 interview during the Kepler Cheuvreux Autumn Conference.

The CEO said the tariff environment was not yet 100 percent defined, but it is “getting clearer and clearer and we are ready to act.”

“Our capacity in the United States can accommodate important industrial moves. So we are still working with the administration to create the final scenario and very soon we’ll be able to communicate around that,” Filosa said.

Stellantis (and GM and Ford) need some relief on production in Canada and Mexico in order to survive, even if a lot of production shifts back to the United States. My guess here, and it’s just a guess, is that in the run-up to a USMCA II, Back In The Habit Of Being Normal Trading Partners, that manufacturers will get some sort of reprieve, and that this will benefit Mexico to a degree.

China Is Waiting In The Wings

While Chinese automakers are likely not going to expand in Mexico immediately, suppliers were all over the IAA show in Munich this week, as Nikkei Asia reports:

IAA Mobility 2025, which runs in Munich until Sunday, is notable not just for the record 116 Chinese auto exhibitors, but for the many parts makers and technology suppliers that aim to set up or expand production and partnerships in the European Union.

After showing the sensors, Jason Ji, research and development director at Zhejiang Wodeer Technology Group, told Nikkei about the workings of oil pumps that are essential for lubricating traction motors and gearboxes in electric vehicles.

While the sensors and pumps are already in mass production in China, Wodeer is preparing to open assembly lines to build them locally at a newly acquired plant and office building in the small German town of Adelberg near Stuttgart.

Alliances are shifting, and it means countries will have to decide if they’re better off sticking with traditional partners like the United States or inviting in more Chinese manufacturing.

GM Shuts Down Building After Employees Contract Legionnaires’ Disease

One of my weird fears is contracting Legionnaires’ disease from walking under a window A/C unit in New York City. If you walk around the city long enough, some errant moisture will fall on you. When it happens, I scream out: “I just got Legionnaires’ Disease” and cover my body in hand sanitizer.

I was reminded of this phobia by a recent report in the Detroit Free Press about GM closing one of its Warren buildings after two people tested positive for the pneumonia-like bacterial condition:

“GM was notified late Wednesday, Sept. 10, by the Macomb County Health Department that two Cole residents had tested positive for Legionnaires’ disease,” Kuhnen said. “Out of an abundance of caution, GM took immediate action to close the building and has ordered comprehensive third-party testing for the site.”

She said GM’s regular bacteria testing at Cole has revealed there are no issues, and, at this time, the building has not been confirmed as the source.

“The health and safety of our employees is our continued priority,” Kuhnen said.

Gross.

What I’m Listening To While Writing TMD

What’s a good song for this Friday? Why not “What The Hell” from Canadian treasure Avril Lavigne… if only for the sweet Panther burnout.

The Big Question

What are you afraid of?

Top photo: Hyundai