Welcome to another In-Wheel Time podcast, a 30 minute mini version of the In-Wheel Time car show that airs live every Saturday morning 8 to 11am, central.
Welcome to the worldwide broadcast of the In-Wheel Time car talk show.
Just ahead, Sundarish Haragu joins us and going to talk about the meaning of tariffs on the automotive supply chain.
Plus, we also have the upcoming events calendar and Mr Mars reviews the new Ford Focus Howdy, along with Mike out of this road, mars down there at the end, king Conrad DeLong in the middle.
Jeff, we always need more Jeff Seekin' out next to me.
I'm Don Armstrong.
Glad you could join us on this Saturday morning for our live broadcast.
We thank you very much for that.
What I was going to say.
It smells a little like Bordeaux or maybe a rosé.
You got like some kind of aroma of wine emanating from you.
Yes, yes, as a matter of fact, a short story here before we get into the car stuff.
So Jeff and Kathy and Leslie and I were at our usual Friday night place, los Teos, and I'm sitting there and all of a sudden I'm thinking something nice and cold just ran down my back and it wasn't a chill, it was an entire glass of wine that the waitress spilled right down my back.
So everybody got into motion and started getting napkins and stuff and I'm thinking oh, touch me, touch me.
Yeah, so I am wearing the same t-shirt actually.
That's what I said.
It wasn't a white wine, it was a white wine.
Yeah, it was Uh-huh.
Well, not a Pinot Grigio, it was a.
Well, whatever it was.
What Leslie drinks.
Yeah, it was all over the floor.
I'm going to get napkins.
They were pulling up his shirt.
They're patting him down like he was a boxer in the ring or something you know.
So that's why I have that little bit of a role.
The good news is it was white wine and not red wine.
That's true, yeah, so there's the story.
There's that.
Interesting.
Hold that thought.
Is there a problem?
Yeah, but I'll take care of it.
Next commercial break Okay, we've been here for an hour.
What have we been doing, Mr Mars, for the past hour?
We were fixing everything that we knew was fixed, but we didn't know we needed to fix this.
Sundares just brought it to my attention.
Yeah, let's see.
When I got here they were all under the table trying to fix the wires that were supposedly fixed week before last Well sometimes they had to fix them.
They were kind of sort of maybe.
Ladies and gentlemen from Oklahoma State University, sundares Harigou, good morning sir.
Good morning and you know thank you for having me back it's.
It's an honor to be on your show.
Well thank you that.
We certainly do appreciate that and you know you made such an impression on us.
We thought, hmm, we need to have this guy as a as a go-to kind of guy.
How would you define automotive supply chain From?
me from the producer To the end user at assembly and all of the components in between that Ship it around locally for where the producer is, ship it around internationally to where the the assembly plants are, and all of the components that arrive.
Yeah, just in time, because but it's not like not all of those things have a tariff on them.
It's usually ones that are imported from across the sea, from wherever that may be.
So now that we've got that established, let's get the real answer.
Let's get the real answer, and and, and.
So what is the where's?
Are we having supply chain issues still after the pandemic?
The biggest one, of course, was the microchip supply, and that thing pretty much crashed and burned almost immediately.
Yeah, no, I think the automotive supply chain, like many other products, but more so for the automotive industry, it's a complex web.
You know, you've got, obviously, the tier one, tier two and tier three suppliers that may be located Pretty close to the facility or sometimes maybe even hundreds of miles.
Let's stop right there, if you don't mind.
Let's talk about tier one, tier two what are the?
What are the tiers mean?
What does that mean?
So I'll start with the bottom.
The tier three would be your companies that supply upholstery and seatbelts and just small components for the car, Gotcha, and these are mom and pop stores that are operating on very thin margins, and so for them even a small disturbance in the supply chain or now we're talking about tariffs and all that right can have a significant impact.
These companies are oftentimes finding it difficult to meet payroll.
So, for example, when we had the auto industry strike, many of these companies were finding it really hard to meet payroll.
So there's those sorts of companies that the bottom end, at the lower end, and then at the top tier one, you've got the suppliers that produce engine parts, produce batteries for electric cars, and then all of the other ones in between, the companies that make your tires and things like that, the electronic equipment that you need for the cars, Right.
So it's a pretty complex web and since you're talking about tariffs today, I don't think there's countries in poor status.
The impact of that doesn't follow a straight line.
Sometimes there are short term consequences, Sometimes some people call it benefits for the country that's imposing the tariffs, but in the long term the impacts could have some unintended consequences.
But yeah, just the automobile supply chain is really one of the more complex ones.
Companies like Ford and GM, but also Volvo, will make cars for the US market exclusively in China.
And so when you know the people who are campaigning to be president next year former President Trump and President Biden you know they're talking about imposing tariffs.
So that impacts the US customers directly because they now have to pay so-called tax right Because these cars are made in China.
Although they have the US brand, they are made exclusively in China and when they are brought here, they are slapped with that 10% or whatever tariff that is imposed.
So it's a tax on consumers.
But as in purpose, besides just being a tax, tariffs can sometimes be a penalty against that producing country, because I know sometimes the China tariffs are done as a penalty against China doing business here.
Yeah, and again, you know.
So the tariffs cut both ways, right.
So there are definitely some benefits, but there are also some you know costs associated with it.
If you go back to 1983 when, you know, president Reagan imposed tariffs on chief Japanese imports.
You know, harley Davidson actually lobbied the government to impose tariffs because they were a company that had almost 100% of the share in the 1960s and 70s.
All of a sudden they went down to about 15% of the market share in late 70s and early 80s.
So they lobbied the government to impose tariffs and so President Reagan I guess against his conservative principles he decided to go along.
But that's a success story, right.
So tariffs definitely had a positive impact.
I mean, harley Davidson not only, you know, is it alive today, but it's also thriving.
You know they used to produce something like that 37,000, 40,000 bikes then now they make 187,000.
Of course, the world population has increased, so there's more demand.
But wasn't?
The original purpose of tariffs was to kind of level the playing field so it wouldn't get all cattywampus.
So in other words, the Japanese cheap model cars that came over here, they would impose tariffs on them to level the playing field with the automotive network here in the United States, correct?
Yeah, absolutely.
I mean I'll go back to the China example.
China being ruled by the Communist Party, they can actually make unilateral decisions on propping up certain industries.
Providing subsidies and even dumping goods in the United States right, like solar panels is a good example.
They're probably dumped here in the United States and there are companies in the US that struggle to compete with them.
So, yes, it does level the playing field.
So, like I said earlier, I mean this clearly has some benefits and some disadvantages to it and we just need to weigh it carefully.
Currently, the Biden administration is saying that we'll adopt a small yard high fence approach.
So they are going to do it selectively for areas where they think, you know, other governments have unfair trade practices that are impacting or hurting the US manufacturers, so they want to impose status there, but not just across the board.
And, to that end, a lot of the offshore car manufacturers.
They are now building factories and have for many years now here in the United States to get around many of those tariffs, if I'm not mistaken.
Yeah, not just in the United States, but also in Mexico and Canada.
So you know I'm going back to China because that's, you know, there are.
We do import quite a bit from China.
Yes, we used to bring like 100 billion.
The World Trade already called the, you know, in China was admitted to the WTO, and today it's like 500 billion.
But Chinese companies now are finding that they can perhaps come into Mexico and start making cars there so they can avoid these tariffs.
And of course our congressional folks caught wind of that and they are saying maybe we relook at how we tax or not tax imports that are coming in from Canada.
Yes, so companies do move into the United States or neighboring countries that we have free trade agreements with, and sometimes that's a good thing, right, like if companies were to come here that creates jobs in the United States.
And, you know, maybe the profits go back to wherever the country that the parent company belongs to.
So the profits go there, but at least the jobs are here.
And likewise, when the US companies move to China to make cars, the profits come back here.
And so there are a lot of complex factors.
Like I said earlier, there's not a straight line.
So ultimately the consumer pays the tariff because the tariff that's imposed on the products coming from China, that's passed through as a price increase.
But who benefits from the tariff?
Just the federal government.
It just goes into the federal government coffers.
Yeah, I mean in 2018 and 2019, when President former President Trump imposed taxes on $300 billion worth of goods.
Well, that raised $80 billion in taxes for the US government, so helped offset some of the deficit, right.
But then you know there are some councils that say that have studied this.
They said, well, this action costs the US economy 250,000 jobs and the trade deficit actually went up.
The thought was that maybe with the tariff we can bring the trade deficit down, but it's still at like $60 billion, with you know, per month with China the term freight on board or FOB.
does that just relate to domestic movement of product, or is that for also the international?
It is international too.
Yes, Interesting.
So what do you see ahead?
Because I know that you guys always look ahead and forecast what we can expect in the next year or two, or five or ten.
What do you see in the near future for us when it comes to these tariffs?
So you know again this we are in the election season, so I think there's going to be a lot of talk about tariffs and things like that, and again there's also a congressional push to impose taxes on certain or tariffs on certain imports from certain countries.
But there are also other factors in the world that are happening, some of which are human made, some of which are beyond our control.
So, for example, the Ukrainian invasion by Russia and the Israel-Gaza conflict, so that is now slowly expanding to include other countries, like the Houthi rebels in Yemen, and so the Red Sea traffic is being disrupted, and so companies like Merck said we're not going to use the Red Sea for the foreseeable future, so they're going to take the shipping down through the Horn of Africa, say from Singapore to shipment
that's going from Singapore to Western Europe.
It's going to go around all of Africa.
And so there's that, and then previously talked about, perhaps another interview that the Panama Canal, which is used for shipments of goods from Asia to the Eastern seaboard in the United States, that has got some weather issues and so the capacity there has been reduced.
So I think there are all these factors that are happening.
One thing we can do is perhaps for businesses, we may want to try to minimize the uncertainties that they have.
I mean, they already have, like you said earlier, the chip shortage that they face.
Now that has been sorted out.
But we've got elections in Taiwan, they've got a new president there that is for sovereignty for their country and that irks China, so we don't know where that's going to go.
So there are all these factors that are beyond our control that are happening overseas.
But then what I guess the US government could do is try to create some, reduce the uncertainties and then provide incentives.
I mean the Build Back Better, the Chips and Science Act and what is the other one, the Inflation Reduction Act right, they are actually, in my opinion, great moves to help provide good infrastructure so that US companies can be manufacturing goods in the United States.
Again, try to level the playing field, because they have all these top infrastructure here in the United States that allows them to compete with other economies of the world.
What do you think is the impact with US Steel?
I know that they've been working on selling US Steel to an offshore company and I have some doubts about that.
Why would we let that happen?
Yeah, especially at a time when US manufacturers, the United States manufacturers of Steel, can only meet 50% of the demand.
So again, we are having to rely on India and China for import of Steel.
Right At such a time, why do you want to facilitate transfer of US Steel to a foreign company, Like you said?
Was it done?
I'm not able to see you yes, yes, it's done.
So, like you said, Don it's, why would you want to do it?
It may not happen, but we'll see.
I think there's going to be to solidify the US based industries for the foreseeable future.
Well, I know once word got out that US Steel was going to do this or attempt to do this, there was a great big pushback from most of the people that would be impacted by having a foreign company own such a huge business here in the United States, because we would really be at the mercy of whatever country that the company was based in.
Yeah, and, by the way, it's not just for the automobile industry but many other industries like I'll give one example, the you know super manufacturer.
They make tin cans.
Well, the raw materials are steel there, so they suffer and then the price gets passed.
You know, the price increases because we don't have enough supply rather enough, yeah, enough supply in the United States.
The price goes up and that's passed on to the consumer, oftentimes people at the you know low income families and people like that.
Sure but didn't the idea of US Steel selling to an offshore entity kind of go contrary to the idea behind tariffs that are used to balance the playing field?
Yeah, I mean, it's like taking supply, a good chunk of the supply, away from the United States and us having to rely on imports.
Exactly, it has opposite impact of, you know, tariffs.
Tariffs, will you know, at least in the short term, will allow you to grow the domestic production and this is counterproductive in my opinion, especially when you know steel is an important industry for a variety of sectors and we are barely producing half of our demand, domestic demand.
Sunderresha, it's always a pleasure to talk to you.
We thank you very much for getting up and joining us in that good looking orange sweater that you got, and I assume with that orange sweater you're telling us, without telling us, that it's cold in Oklahoma this morning.
It is cold and the orange color is in honor of Conrad who's and who is Go cowboys.
Well, that was yeah, that was the prompt to go ahead, and you and Conrad could get married for just a couple of seconds here and love each other.
So, anyway, sunderresha, it's great to talk to you, my friend.
Thank you.
Likewise, and I enjoyed it.
Look forward to talking again in the future.
You got it.
We will be in touch.
Thank you, sir.
All right time now here on the Inwheel Time Car Talk Show.
For the car calendar, we've renamed it.
We're not gonna do the events, we're not going to do the actual cruise ins, but we have a combination of whatever Conrad comes up with.
If you don't get it right, we're gonna put a tariff on you, that's it.
So the winner, conrad Swampmeat up in Montgomery County Fairgrounds is February 16th through 18th, off of 9333 Airport Road up in Conrad, stephanie Nichols 13th Annual Car and Plane Show in Georgetown Airport is going to be February 24th.
Cars and cocktails is gonna be at Woodrow's in Tomball in first of February.
First weekend of February.
The 11th Annual Rouse Rockin' Rides is March 2nd.
And do you have dates yet for Hot Rod Tour of Texas?
That's the end of April.
Yeah, last weekend in April.
Hot Rod Tour of Texas 25 or 26, 28, something like that, which is gonna be huge again this year.
It seemed to grow every year.
And let's not forget the automotive show.
Correct, that would be the last one that you're going to talk about.
The last one I was going to talk about yes.
But you didn't talk about it.
And we'll have Rachelle on the show here later today to talk in detail about it.
I see you didn't just sit in one of spoiler thunder, Okay Well that's one way to tiptoe around, that wasn't it?
Yeah, yeah.
Because you didn't have it on your sheets.
There, did you?
Just helping you out, conrad.
He's not.
He's just looking at me like I didn't have my sheet together.
I see.
No, you didn't, all right, well, anyway.
So you'll hear about the automotive show here in just a moment, all right, so I'm going to go ahead and do a quick review of the car review.
Mr Mars, did you do your homework, or did the dog eat it too?
Well, I kind of did my homework, but Conrad is segueing for me because I cannot tell you why.
I apologize.
Your paperwork's missing.
I told you it was the focus, but everything else says it's the escape.
So I told you wrong.
That's what it says.
Oh my God, it's a Kona.
You know, let's do the Kona.
Let's do the Kona Kona.
Yeah, no, let's do the Pontiac Bonneville, shall we?
That was a good guy.
That was too big.
So I had the 2023 Ford Escape Platinum All Wheel Drive even though I told Conrad Don I had the focus, now this vehicle, and I don't know why I did that.
I apologize, but the Escape comes at 8 trim levels for 2023, and we had the Platinum, which is the top of the line.
This is a compact SUV.
It's a very competitive segment.
This vehicle will seat five people.
It's been updated a little bit from 2022.
It's got active grille shutters, it's got rain sensing, wipers, led lighting, fog lamps, headlamps, tail lights All of that good stuff.
Got roof rack side rails on it and it's rolling on some 19-inch dark aluminum wheels.
It's a nice looking car.
It's not going to stand out a whole lot different from a lot of the other cars in that segment, but it's a very nice looking car.
It's one of those cars that when you first see it, yeah okay.
But after spending a week in it I realized I was enjoying driving this car Inside because we had the Platinum.
We had the leather seating with the sport buckets up front.
They are heated.
They have ventilated seats on this particular vehicle Could tell you why Just not there.
There is a rear seat console and that kind of goes along with.
There's a lot of things on this car that you don't normally or you may not normally see in the compact SUV segment 12.3-inch
diagonal digital screen for the driver info, or basically we used to call it instrument panel.
13.2-inch
heads-up display in the center stack.
You're going to find your SYNC 4 infotainment center there, your nav, your convenience controls, 360-degree camera.
That works quite well, and there's also wireless charging and USB ports.
Now, up under the hood, there's actually three different power options you can have, but we had the 2.0-liter
inline-four EcoBoost At 250 horsepower at 5500 RPM and 280 pound-feet of torque with an 8-speed Automatic.
This thing has plenty of power even though it weighs 3,543 pounds.
How?
much 3,543 pounds Seriously One and a half why I didn't think it was that heavy.
I looked at it twice.
To look at it, it doesn't look like it's that heavy Now they're all getting bigger.
I mean, it's like being on steroids.
You know, Stupid, the EPA says you should be looking for 23 in the city, 31 on the highway, combined for 26.
Now I've got 26.4
miles to the gallon in this vehicle, across 205.1
miles With your fat foot.
Well, I'm a year older now and I've kind of lightened up on that a little bit.
I'm more mature now.
Yeah, oh my God, and his new middle name is Pinocchio, after 83 years, but again, like I said, after being in this car for a week.
it grew on me.
It felt better as far as the driver perspective.
It's not a race car by any means.
It's got a nice view.
As far as the driver's perspective, the back's a little bit.
You lose some because of the pillars in it, but that just comes with a category and I will say that you put it up in the drive into the sport mode, it tightens up the steering and everything a lot.
Still not a race car, but it just feels a whole lot better when you do that.
And because it's a little heavier, it's got a pretty composed ride out on the highway.
I was kind of surprised.
It's still got a lot of things on the inside of it that you know that you're in a less expensive car.
No-transcript.
Like I say, I was impressed.
Base model price on this vehicle is $29,495.
You can get into it Now.
The base trim price for the Platinum level is $38,460.
However, our MSRP on the big vehicle we were driving is $41,965.
For a compact sport utility that starts at $29, and yours was $41,000.
Yes, you look across at the others Honda CR-V, based on its $28,410.
Top of the line on its $34,260, but that does not include the all-wheel drive.
The RAV4 starts at $28,2.
The Mazda CX-5 starts at $26, so they're all in that upper 20s as far as starting goes, and then from there it kind of depends on where you want to go with all-wheel drive and all the other accoutrements that you want to get.
But again, as I said, to look at it, it's a very competitive segment.
There's a lot of cars that are going to look a whole lot alike in a lot of instances, but after driving it for a week I was pretty comfortable and I think that's something you should look at.
$41,000, you ought to be.
Well, I was Good and I'm glad to see that that new word for the day app you have is paying off with accoutrements.
I think I got that from.
Don actually oh boy Speaking of foreign, among other things, that.
I can't repeat, yeah.
Speaking of.
Ford Motor Company.
They're recalling nearly 140,000 of the Ford Focuses that Mars was supposed to have a review of today and the EcoSport crossover for faulty engine oil pumps that are linked to a federal investigation and alleged crash with two injuries 2016 to 18.
Focus 20 at 18 to 2022.
Ecosport vehicles with the one-liter engine and the six F 15 automatic transmission.
Oil pump, drive belt or drive belt tensioner on those vehicles could fail, resulting in a loss of engine oil pressure that might trigger an engine stall and loss of power breaking.
Oh, yeah, catastrophic engine failure.
Yeah.
So think about that.
They put a belt in the oil crankcase system expecting it to last.
It should have been recalled long ago.
Just keeping it lubed, keep it moisturized, yeah Well, the belt doesn't last, yeah.
Thank you.
You know I try to keep this all under control here, but sometimes it's difficult.
Hey, this program is available 24 seven on iHeart radio.
Yep, Just look for Inwheel Time Car Talk.
We also have video stream on Facebook, YouTube, Twitch and InwheelTimecom Podcasts available from your favorite podcast provider.
The Inwheel Time Car Talk Show continues right after this quick break.
Oops, well, I'm going to start that again.
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The original group of Lupe Tortilla restaurants will have you telling your family and friends just what the original recipes mean when it comes to the best fajitas in Southeast Texas.
Founder Stan Holt invites you to visit the original Lupe Tortilla near I-10 in Highway 6.
Here's the original house that inspired the design of all the rest and the original charm that helped make Lupe Tortilla the go-to destination for Houston Tex-Mex.
Speaking of original, nothing can compete with the original lime pepper marinade.
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It's a great place to enjoy those famous frozen margaritas before or after the game.
From the United East to Louisiana, stop in at the Lupe Tortilla in Beaumont.
It twos on I-10, you can't miss it.
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That's it for this podcast episode of the In Wheel Time Car Show.
I'm Don Armstrong inviting you to join us for our live show every Saturday morning 8 to 11 am Central on Facebook, youtube, twitch and our InWheelTimecom website.
Links are available on Apple Podcast, spotify Stitcher, iheart Podcast, podcast Addict Tune In Pandora and Amazon Music.
Keep listening and we'll see you soon.
About this episode
Sundarish Haragu joins the In Wheel Time Podcast to discuss the complexities of tariffs in the automotive supply chain, highlighting their impact on both manufacturers and consumers. The conversation delves into the tiered structure of suppliers and how tariffs can create both benefits and challenges for the industry. Additionally, Mr. Mars reviews the 2023 Ford Escape, detailing its features, performance, and pricing in comparison to competitors. The episode wraps up with a calendar of upcoming automotive events.
Uncover the secrets of the automotive supply chain labyrinth with our expert guest Sunderesh Heragu, as he paints a picture of the intricacies involved, from the multilevel supplier to the financial tightrope walked by smaller suppliers. Discover how tariffs can send shockwaves through this complex system, possibly leading to steeper prices that hit our wallets. Plus, enjoy a lighter moment with an anecdote of a wine mishap—proof that even in the world of serious industry talk, there's room for a little spillage and smiles.
The plot thickens when we delve into the potential offshore ownership of US Steel and its implications for American industries reliant on steel, like automotive and tin can production. Imagine the irony of tariffs aimed to protect, yet the sale might undermine these very industries—it's a twist worthy of a Hollywood script! We'll also share a chuckle over Sunderesh's savvy in the face of Oklahoma's upcoming winter chill and we preview some car-related happenings.
In our New Car Feature segment, Michael Marrs offers his take on the 2023 Ford Escape Platinum AWD—a story you won't want to miss.
Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.
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