York’s Largest Spanish Weekly Newspaper, Jan. 9, 2017 – President-elect Donald Trump – and his prolific Twitter finger – is the talk of this year’s North American International Auto Show.
Throughout his presidential campaign, and after the election, Trump criticized automakers for moving U.S. production to Mexico, often through tweets. He has threatened a 35-percent tariff on Mexican-made vehicles that are exported to the U.S. Such a tariff could wreak havoc on the industry, since every major automaker produces vehicles in Mexico.
Here’s how auto industry executives have reacted to Trump at the auto show:
FCA CEO Sergio Marchionne said his company will adjust if the rules change. Marchionne said it’s possible FCA would have to withdraw from Mexico if tariffs were too punitive. And FCA has delayed plans to find a partner to build small cars until it learns whether tariffs will be put in place. “I think we all need clarity,” he said. But Marchionne also said FCA feels strongly about keeping SUV and truck production in the U.S., which helped bail out the company during the recession. “We owe a lot to this country,” he said. The company on Sunday announced a US$1 billion investment in two U.S. factories, and the creation of 2,000 new jobs. Trump congratulated the company on Twitter.
Herbert Deiss, a member of Volkswagen’s management board, said Volkswagen won’t change its production plans in response to Trump. “Mexico is one of our biggest markets,” he said. But he also emphasized that Volkswagen has made significant investments in the U.S. that should help allay Trump’s concerns, including the opening of a plant in Tennessee in 2011. “We do a lot of investment here, even vehicle development, so I think we will be fine,” he said.
Ford Motor Co. Executive Chairman Bill Ford said he has talked to Trump multiple times about trade and tax policy and currency manipulation. “I found him to be very informed and respectful of our positions.” But Bill Ford bristled when asked if Trump is affecting Ford’s production plans. In addition to canceling plans to build a plant in Mexico, Ford recently decided not to move production of the Lincoln MKC SUV from Kentucky to Mexico. “We made that decision and we’ll always make the right business decisions for Ford,” he said.
North American CEO Jim Lentz says Trump’s threatened border tax could force automakers to raise prices, pushing down sales and eventually causing production cuts and factory layoffs – the opposite of what Trump wants. Using the midsize Camry, America’s top-selling car, as an example, Lentz says 25 percent of the Kentucky-made car’s content comes from outside the U.S. A 35 percent border tax would add US$1,000 to the Camry’s price, he said. “My concern for the industry is cost goes up, likely the size of the industry goes down. The industry doesn’t have to produce as many vehicles and it affects employment negatively,” he said. Lentz doesn’t object to Trump’s comments because he also wants a stronger economy and more good-paying jobs here.
GM CEO Mary Barra said the company has no plans to shift production in response to Trump. She said the company decides two to four years ahead of time where it makes vehicles. But she thinks GM and Trump have some common ground. “I very much look forward to being part of the solution that allows the country to be strengthened along with business, along with our manufacturing capability,” she said. Barra is part of a group of CEOs that will advise Trump on economic issues.
Scott Keogh, president of Audi of America, said he hasn’t talked with Trump or his associates. Keogh said Audi’s decision to build a plant in Mexico – which opened in September – was made five years ago and the plant builds vehicles that are exported globally, not just to the U.S.
Honda Motor Co. CEO Takahiro Hachigo told reporters through an interpreter that the automaker wants “to continue as we have done to work on development and production of U.S. products.” He said he can’t comment on threatened tariffs and said it’s “too early” to discuss other policy proposals.