You have reached your limit of free articles this month.

Enjoy unlimited access to myStatesman.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and bonus content- exclusively for subscribers. Starting at just 99¢ for 8 weeks

X

Welcome to myStatesman.com

This subscriber-only site gives you exclusive access to breaking news, in-depth coverage, exclusive interactives and bonus content.

You can read free articles of your choice a month that are only available on myStatesman.com.

Carmakers shift focus to U.S. after threats by Trump


President-elect Donald Trump is not attending the country’s premier auto show here. But his vow to impose tariffs on imports from Mexico has changed the focus of the show from what new vehicles are on display, to where they are made.

More than anything, said Sergio Marchionne, the chief executive of Fiat Chrysler, the industry needed to know what was going to happen with the North American Free Trade Agreement, which allows for a free flow of trade between the United States and Mexico.

“We need a clear indication of how the U.S. administration plans to deal with NAFTA,” Marchionne said at the auto show. “We’re just waiting for clarity.”

Trump has made the auto industry a frequent target, attacking automakers for selling Mexican-made vehicles in the United States. In response, some automakers have somewhat changed their strategy.

Ford said Monday that it would produce a new pickup and sport utility vehicle in a factory that is losing car production to Mexico. Fiat Chrysler announced Sunday that it would invest $1 billion and create 2,000 jobs in the United States.

After the announcements from Fiat Chrysler and Ford during the auto show, Trump reversed course. He thanked the companies for commitments to add jobs and products at plants in Michigan and Ohio, and took credit for the decisions.

“It’s finally happening,” Trump wrote on Twitter in reference to the job growth, adding, “Thank you Ford & Fiat C!"

What is unclear, though, is where the auto industry will head from this point. And that was a running discussion in the first two days of the sprawling Detroit auto show, which opened on Sunday and is usually known far more for talk about engines than economic policy.

Marchionne, for example, said that although Fiat Chrysler was eager to add jobs and production in the United States, the company was less certain about further investments in Mexico.

“The reality of the Mexican auto industry has been tooled up to try and meet demand in the U.S. market,” he said. “If the U.S. market is not there, its reason for existence is on the line.”

Most major automakers have sizable manufacturing operations in Mexico that export to the United States and elsewhere.

Factories in Mexico are considered an integral part of global business strategies. But Trump has zeroed in on how investment in Mexico may be hurting the chances for U.S. job growth.

Ford, for example, recently canceled plans to build a factory in Mexico, a proposal that had been repeatedly criticized by Trump.

The president-elect also scolded GM for importing small Chevrolet Cruze hatchbacks from Mexico to augment its production of similar vehicles in the United States. But Mary Barra, the company’s chief executive, said it was too late to turn back on that decision.

“This is a long-lead business with high capital investments, decisions that were made two, three and four years ago,” Barra said at an auto show event promoting a new GM SUV.

However, Barra said GM was eager to work with the incoming Trump administration on issues related to manufacturing and job growth.

She said that she had spoken with Trump last week after his Twitter post about the Mexican-made Cruze and that she expected that dialogue to continue.

“There’s a lot of work to do,” Barra said. “When you really look at some of the things the president-elect has said, we have much more in common than we have different.”

Toyota, the Japanese automaker, has also been a recent target of Trump’s. At the show this week, the company is emphasizing the American character of its new cars.

The automaker unveiled a new version of its Camry sedan, which is built at a factory in Georgetown, Kentucky, that employs 7,000 workers. The 2018 model that Toyota showed was sportier looking than previous versions and came with a suite of new safety features designed to stop the car and prevent accidents.

William D. Fay, general manager of the Toyota division, said the new Camry illustrated how much of an American company Toyota had become. Over the last three decades, it has built 10 assembly plants in the United States and has added engineering operations that develop many of the cars and trucks it sells here. The company’s U.S. workforce totals 136,000 people.

The Camry, the top-selling passenger car in the country, “spearheaded our Americanization story,” Fay said. “It is built for Americans by Americans.”

While executives are busy defending their companies’ manufacturing plans in the United States and elsewhere, industry analysts are trying to forecast what effect tariffs or curtailed Mexican production could have on the booming U.S. market.

“Any policy that leads to closing well-functioning plants would be a waste of resources,” said Xavier Mosquet, an analyst with Boston Consulting Group. “Everybody is at full capacity.”

Questions are also being raised about imports into the United States from countries other than Mexico, and whether Trump will consider tariffs on vehicles built in Europe or Asia.

The entire debate is unsettling to automakers, some of which nearly collapsed in the last recession and are now enjoying strong comebacks.

They worry that policies enacted by the Trump administration could put the brakes on the U.S. market, which last year set a second consecutive annual sales record, with 17.55 million vehicles sold.

But despite the president-elect’s disdain for some imported vehicles, some foreign automakers remain keenly interested in breaking into the U.S. market.

At the show on Monday, Guangzhou Automobile Group, one of the largest automakers in China, displayed an SUV that the company hopes to sell in America one day.

The company’s president, Qiujing Wang, said in an interview that its current plans were to enter the U.S. market in 2019.

“We believe the American consumer will be interested in this car because of the styling and driving experience,” he said, adding that the company needed to thoroughly prepare its vehicles to meet U.S. safety regulations.

He expressed more concern that a Chinese-made vehicle would meet quality standards expected by American consumers than that tariffs could penalize imports.

“We believe the trade door will be open to Chinese products,” he said. “And the only condition to entering the U.S. market will be quality.”


Reader Comments ...


Next Up in Politics

Federal workers grapple with the era of Trump
Federal workers grapple with the era of Trump

A Veterans Affairs employee is confused about whether he can display a bobblehead doll of President Donald Trump on his desk. A Federal Aviation Administration staffer wonders whether parking a car with a blue "Bernie" bumper sticker is allowed in the agency lot. Another federal worker is demanding that a colleague who called Trump a "...
US transportation secretaries have left a lasting legacy in D.C. region
US transportation secretaries have left a lasting legacy in D.C. region

U.S. Transportation Secretary Elaine Chao had been on the job only a few weeks when she took action on one of the region's most intractable problems and directed millions in federal transit dollars be withheld from the District, Maryland and Virginia until they create a safety agency to oversee D.C.'s subway, Metro. Chao was making good on a threat...
Congressional town hall: Tums, death panels and ‘shut your hole’
Congressional town hall: Tums, death panels and ‘shut your hole’

Republicans home for the congressional recess have been greeted with an earful at town hall-style meetings. Many lawmakers have no such meetings scheduled — sparing them the possibility of a YouTube moment — but opening them up to criticism that they are ducking their constituents. ‘Democracy in action’ met by boos in Florida...
Tribes look to Trump to save their coal plant
Tribes look to Trump to save their coal plant

On Navajo Nation territory near Page, Ariz., news about plans to shutter a hulking coal plant that has been the workhorse of the struggling local economy for decades came like a punch to the gut. Now tribes and plant workers are demanding relief from the person who vowed to end these kinds of devastating announcements — Donald Trump. The plight...
'California is a nation': Fringe movement wants break from US
'California is a nation': Fringe movement wants break from US

About 15 people huddled in a luxury apartment building, munching on danishes as they plotted out their plan to have California secede from the United States. "I pledge allegiance, to the flag, of an independent California," Geoff Lewis said as he stood in a glass-walled conference room adorned with California's grizzly-bear flag and a sign...
More Stories