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Why the auto industry’s big investments may have everything and nothing to do with Trump

U.S. President-elect Donald Trump rides in an elevator after escorting Martin Luther King III to the lobby after meetings at Trump Tower in New York City on Jan. 16. (Dominick Reuter/Agence France-Presse via Getty Images)

Within an hour of GM’s announcement that it would spend $1 billion to expand manufacturing in the United States, President-elect Donald Trump fired off a pair of tweets claiming credit for the automaker’s decision.

It was the same announce-and-tweet pattern that has emerged in the weeks since Trump started to heavily criticize automakers for building cars in Mexico that they then sell in the United States. In just two weeks, a string of automakers have unveiled massive investments in their U.S. operations, announcements that Trump has pointed to as fulfilling his campaign-trail promise to revive America’s manufacturing sector.

But none of the automakers have directly attributed their expansion plans to Trump, and many companies say they were in the works well before he clinched a victory in November. What’s more, those who stand to benefit most from the influx of jobs are not likely to be the same working-class manufacturers who helped propel Trump to office.

“As with Ford, Fiat Chrysler, Hyundai and Toyota before, General Motors announcement today is mostly theater to play in the news cycle created by President-elect Trump’s tweets,” said Michelle Krebs, a senior analyst at Autotrader. “These investments and hiring plans have long been in the works and are a continuation of what the company has been doing in recent years — trying to run a successful, profitable business.”

“The only thing ‘new’ here is GM’s aggressiveness in announcing its plans,” Krebs added.

A GM spokeswoman said executives have been weighing the investment decisions for years and the company cast Tuesday’s announcement as part of a broader restructuring that has been underway since before Trump was even a presidential candidate.

The $1 billion investment will allow the company to add or keep 1,500 jobs in the United States, executives said. The company will also shift certain production and supplier jobs to Michigan from Mexico, a move that is expected to create more than 500 jobs in the United States. A spokeswoman declined to specify how many jobs were new and how many would move from Mexico.

But in December, GM announced that it would cut about 3,300 jobs at three U.S. plants this year because of slowing demand for cars. Those employees will still be out of work, a spokeswoman confirmed.

What Trump’s election may have influenced is the timing of the announcement.

“This is obviously a time right now when every automaker is trying to get on the new administration’s good side,” said Michael Harley, an analyst at Kelley Blue Book. “Right now everybody wants to be tossing favors in the president-elect’s direction.”

Trump has threatened to impose a 35 percent tariff on cars brought to the United States for sale, and repeated that position Monday in an interview with a German newspaper. He has also suggested policy changes that the automotive industry will want to see enacted, such as lowering corporate taxes and curtailing federal regulations.

Since the start of the year, investment announcements have been large and frequent. Ford, Fiat Chrysler and Toyota pledged to spend billions and hire workers here. Hyundai executive revealed plans to spend $3.1 billion in the United States over five years and possibly build a new factory here, Bloomberg News reported Tuesday.

“There’s no question about the emphasis on job creation in the U.S. right now, and we found it good timing to share what we are doing, including our ongoing commitment and track record for U.S. investment over the last several years,” a GM spokeswoman said.

But the bulk of GM’s hiring will not be traditional auto manufacturing. The company plans to add another 5,000 jobs in the next two to three years — all of them salaried positions in finance or engineering. Indeed, the company said it has created 25,000 jobs in the United States over the past four years, including 19,000 professional, salaried positions and 6,000 hourly manufacturing positions.

As Brett Smith, an analyst at the Center for Automotive Research, told The Washington Post earlier this month, automobile companies are primarily investing in high-tech facilities in the United States that will develop and produce a new generation of more technologically advanced vehicles.

“That will ultimately mean fewer jobs,” Smith said. “The people will have to keep learning throughout their careers. It won’t be like the old days, when you do the same thing for 40 years.”

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