Car Makers Push Back Against Trump
January 09 2017 - 5:07PM
Dow Jones News
By Chester Dawson and Mike Colias
Auto makers pushed back against Donald Trump, denying his
assertion that they are hurting U.S. employment with plants outside
the country and warning that uncertainty over the president-elect's
trade policies could wreak havoc on one of America's bedrock
industries.
Executives gathered at Detroit's annual motor show Monday said
trying to roll back investments outside America would ding profits
and weaken their businesses. Mr. Trump made car makers a constant
target in campaign speeches and a recent series of tweets,
criticizing them for moving manufacturing jobs outside the U.S. and
threatening high tariffs on cars made outside the country.
"We need clarity," Fiat Chrysler Automobiles NV Chief Executive
Sergio Marchionne told reporters on Monday, noting it was hard to
have a debate about trade over Twitter. "None of us have had a
tweeting president before. It's a new way of communication, and
we're going to have to learn how to respond."
Mr. Marchionne's comments came one day after Fiat Chrysler
announced $1 billion worth of investments for two factories in the
Midwest. Mr. Trump on Monday praised that decision. Mr. Marchionne
later in the day said the timing of the announcement -- which came
in the wake of Mr. Trump's criticism on Twitter of General Motors
Co.'s and Toyota Motor Corp.'s Mexico plans -- was "coincidental
with all these tweets coming out," and said the company hadn't been
in contact with the incoming administration.
Ford last week scrapped plans for a new $1.6 billion assembly
plant in Mexico, instead choosing to build small cars in an
existing Mexican factory, and invest $700 million in a Michigan
facility that will build electric vehicles.
The threats of high tariffs on cars manufactured outside the
U.S. and brought into the country have sparked concern in the auto
industry, which relies on lower-cost factories in Mexico for more
than 10% of U.S. auto sales. GM last year became the first major
auto maker to import vehicles from China: a Buick sport-utility
vehicle. Detroit auto makers import a variety of vehicles from
south of border, ranging from subcompact Ford Fiestas that yield
little profits to high-margin Chevrolet Silverado or Ram pickup
trucks.
GM's North America chief, Alan Batey, said Monday the industry
has been unfairly singled out, and said it would be more
appropriate for the incoming administration to target others,
including electronics makers like Apple Inc., if restoring American
jobs is a priority.
"I'm not sure we're the bad guys," Mr. Batey said. "I think
there are a lot of other industries that probably over time will
get into this discussion. I don't know, for example, how many
iPhones are made in the U.S. for U.S. consumption."
Apple's iPhone is primarily made in China. Mr. Trump has
criticized the Cupertino, Calif., tech giant's manufacturing
policies in addition to barbs aimed at the auto industry and other
U.S. manufacturing companies.
An Apple spokesman said the company has contributed to two
million jobs in the U.S. across suppliers and developers, including
1.4 million among mobile-app developers, and said the company
continues to increase the size of its U.S. workforce.
GM's Mr. Batey, like many of the executives presenting at the
auto show, rattled off a list of statistics that support claims
that reliance on Mexico is limited. GM, for instance, imported
roughly 700,000 vehicles from three Mexican factories last year,
but 70% of the parts used in them were made in the U.S., he
said.
Mr. Batey said GM is eager to make its case to the incoming
administration.
"I think there will be some surprise about the facts," he said.
"When we sit down and show the complexity of our business, the lead
time of our decision making, the jobs we've created, the facts
around what is really happening, I think you're going to get a very
very different picture."
Dieter Zetsche, the onetime head of Chrysler who now runs
Germany's Daimler AG, told reporters to remember Mr. Trump's
inauguration is still more than a week away. "All these 'what ifs'
don't lead anywhere," he said.
Volkswagen AG executives said the company won't change its
Mexico sourcing strategy. The German auto giant, currently
negotiating the settlement of a U.S. criminal probe stemming from
the company's admitted emissions cheating, is a "strong, invested,
good corporate citizen in the United States," said Hinrich
Woebcken, Volkswagen's North American chief. He pointed to $7
billion in planned U.S. investments and said the company employs
45,000 people in the U.S., when including dealers.
Write to Chester Dawson at chester.dawson@wsj.com and Mike
Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
January 09, 2017 17:52 ET (22:52 GMT)
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