Dividends and Biden wants to help retool US auto plants for electric vehicles

All of us grow up in different eras of the economy and that reflects our outlook, for a person of President Biden’s age, there was a golden age when people could leave high school and work at an auto plant earn a middle income salary or more and retire with a good pension. There were hundreds of thousands of jobs at the auto plants across the country and for many auto plants helped define their community as the auto plant was the biggest employer in the town. If you could not work for the auto plant, then there were supplier companies. At some point that began to change, automation was more important than people and wages were cut, but cars and trucks and what they mean to an individual freedom remain.

In the Build Back Better infrastructure bill, there is money allocated to helping the auto companies retool to build electric vehicles, there is also a rebate to bring the cost down to consumers. Whether the auto companies actually need the incentives particularly when they have all committed to having electric models by 2030 is another point, but politicians like to cut ribbons and cutting ribbons at auto plants is a good thing.

In an article by Joseph White and David Shepardson of Reuters, The Biden Administration is allocating $50 billion in tax breaks, incentives for government agencies to buy electric vehicles, loans for retooling factories and aid to automotive plant communities. (note: there are fewer parts in an electric vehicle than in gasoline vehicle, which means some plants will eventually close down).

GM’s head of global manufacturing, Gerald Johnson, told Reuters that federal spending could accelerate demand for electric vehicles, which means GM needs flexibility in its manufacturing. However when the plan does pass, it does not change what we are doing.

In terms of salary, Tesla workers in a new factory in Texas are expected to start at $47,000 while auto workers at GM start at $28 a hour or $56.000.

Linking to dividend paying stocks, all companies including profitable companies use government grants and tax breaks, however the issue is what drives the company. If the company is doing something and the government incentives help it, then it should use the incentives. If the company is doing the work because of the incentives, as soon as the incentives change and they do under different administrations, the work is cut. How does the companies you invest in use government help?

There are more questions than answers, till the next time – to raising questions.

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