00:00You know, generally speaking, in Detroit, the car companies worry about this because they've got long-standing manufacturing there.
00:07There are a lot of big Canadian parts suppliers, too. Magna is big. Martin Ray is another one that's a
00:12good-sized company.
00:14They send a lot of parts over the border.
00:16Very quietly, Toyota makes a lot of vehicles in Ontario, and Ford and General Motors still have production over there,
00:23so does Stellantis.
00:24So, look, the car companies don't like anything that really is going to upset their supply chains any more than
00:30it already has.
00:31Mexico has already been a big deal for them, and certain parts of Asia as well.
00:36So they'd rather see the status quo remain in place and hope it does here.
00:41In fact, the car companies generally want to see USMCA remain as similar to what it's been since Trump set
00:50it up, what, five, six years ago to begin with.
00:53But, you know, that's not going to be the case, but they have been fighting to sort of claw back
00:58some exemptions to that and reduce their cost.
01:02That's why General Motors, one of the reasons General Motors had better earnings today is they've managed to lobby their
01:06way into at least a little bit of a reprieve on these tariffs.
01:10And looking at the GM results here, this is, you know, right back to their playbook, which is, I mean,
01:15they boost their 2026 ALEC due to premium pricing on big trucks.
01:19Boy, that is America's auto industry today.
01:22Premium pricing, big trucks, SUVs.
01:25That seems to be working for certainly Ford here.
01:28I mean, GM.
01:30It did.
01:31Well, it's working for all of them, really.
01:33A couple of things.
01:34So, yeah, they are charging a lot of money for their big vehicles.
01:39Now, we did actually, I will say this, we did see some discounting on pickup trucks.
01:44As the, you know, the competition is always tough in that segment.
01:47And you've got high fuel prices that I think is keeping some buyers on the fence for a while.
01:55So, you know, there's a bit of that going on.
01:57But GM's average vehicle is selling for $52,000.
02:01And, you know, that's an expensive vehicle.
02:04So they are keeping price up.
02:07That's one of the things that's doing well for them.
02:09We talked about tariff relief.
02:10They have lower warranty costs.
02:12That's helping them as well.
02:13The other thing, too, to keep an eye on, they've been boosting production.
02:17They had pretty lean inventories throughout the second quarter.
02:20So some of this is that they're just kind of putting more into the channel to their dealerships.
02:26And now GM says it's sustainable and that they see similar momentum into 2027 or 26 and 27.
02:35But they've got to deliver on that.
02:39Otherwise, you know, they're building inventory and they may have to pull back at some point.
02:42Okay, so GM and Ford, they're all doubling down on these big premium trucks.
02:49What does the carmaker strategy look like when it comes to hybrids, when it comes to EVs?
02:54Because my understanding is there was another charge related to reduced production of EVs.
03:01That's right.
03:02And what that charge is, it's basically for stuff they've already announced.
03:05But they've had to pull back production on the batteries they make for the EVs.
03:09And they've had to pull back on production of the electric vehicles themselves.
03:12They're retooling a plant in suburban Detroit that they thought was going to make electric pickup trucks.
03:17But nobody buys electric pickup trucks.
03:18They don't buy GMs.
03:19They don't buy Ford's.
03:20They don't buy Tesla's.
03:21They don't buy Rivian's.
03:22No one wants an electric pickup truck.
03:24So right now what you're seeing are these charges coming through the system.
03:29And GM has taken a total of $11 billion in charges there.
03:32They haven't canceled a single electric vehicle in that lineup.
03:36They still sell a dozen different EVs.
03:38And that's their strategy.
03:39They don't have any hybrids on the market now except for the E-Ray, which is a Corvette, very low
03:44volume.
03:45They say they're going to have a handful of them coming.
03:47Mary Barra told Bloomberg TV that.
03:50But not on the market yet.
03:51Ford only has a couple.
03:52Stellantis, very little presence there.
03:55Right now that's a Hyundai and Toyota and two-degree Honda game.
03:59And all three of them are getting good sales gains in the U.S. market because they've got hybrid electric
04:04vehicles at a time when gas is selling for more than $4.
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