Not knowing what to expect from President-elect Donald Trump once he moves into the White House, automakers spend yesterday issuing nice-sounding congratulatory messages that masked an industry-wide concern over what happens next.
Formal pleasantries aside, one automaker feels that Trump’s policies could stand to benefit its bottom line.
Trump’s campaign promises reeked of protectionism, but time will tell whether his policies in office reflect his hard-line stance on keeping jobs in America at all costs. Automakers are obviously quite concerned with costs, otherwise they wouldn’t make a habit of sending low-profit small car production to Mexico.
Yesterday, however, car manufacturers kept their worries in the background. Statements issued by all Detroit Three automakers appealed to a sense of cooperation.
From General Motors:
GM congratulates both candidates and parties on their hard-fought campaigns. GM looks forward to working with President-elect Donald J. Trump and the new Congress on policies that support a strong and competitive U.S. manufacturing base.
GM will continue to do its part to transform the future of mobility and contribute to America’s competitive strength.
Christin Baker, spokeswoman for Ford Motor Company, said, “We agree with Mr. Trump that it is really important to unite the country, and we look forward to working together to support economic growth and jobs.”
The acrimonious relationship between the automaker and Trump only grew during the election campaign, which kicked off with a promise to tax Ford products imported from Mexican plants to the tune of 35 percent. That promise also went for other automakers.
Fiat-Chrysler Automobiles offered a similar statement:
FCA US looks forward to working with President-elect Donald J. Trump and the new Congress to strengthen American manufacturing and build a more secure future for our employees, customers and society.
Industry watchers have doubts as to whether Trump could actually follow through on his promise to scrap the North American Free Trade Agreement. Such a move, if doable, would heap costs onto smaller vehicles imported from Mexico, inflating prices and putting domestic manufacturers at a sales disadvantage in their own country.
Donald Grimes, economist at the University of Michigan, told Bloomberg that repealing NAFTA might not require congressional approval. A trade war could erupt if the U.S. goes this route, he said, with World Trade Organization members striking back with their own tariffs if Trump uses anti-dumping provisions to boost taxes on incoming vehicles. German manufacturers expressed concern over this prior to the election.
Many analysts have claimed Trump’s trade rhetoric amounts to nothing more than campaign bluster. As well, the WTO hasn’t gone easy on countries that have used the anti-dumping provision. Two years ago, the body ruled against China after that country placed a raft of taxes on imported American vehicles.
The Detroit Three, as well as Toyota and Honda, also have assembly plants in Canada. Following Trump’s win, Canada has signaled its willingness to renegotiate NAFTA.
One automaker with overseas headquarters sees a potential silver lining in Trump’s win. Speaking to Auto Express, Volkswagen brand chief Herbert Diess said news of Trump’s win surprised him, but added that his presidency could stand to help the company.
“The first comments from Mr Trump have two potential interpretations, but the majority of people seem to be saying that his plans might boost the American economy,” Diess said. “That would be favourable for us, because we are restarting in the United States. So I see it optimistically.”
[Sources: Detroit Free Press; Reuters]
Theoretically, how much could Trump’s EPA let VW off the hook?
And, how much would rolling CAFE back to 27.5/21.0 help?
Realistically that ship has sailed. There’s been an agreement approved by a judge. Why on earth would Trump want to help a foreign company anyway? As far as CAFE being rolled back, maybe we can have fewer small turbo engines that only get good gas mileage on the EPA test.
“Why on earth would Trump want to help a foreign company anyway?”
I have no idea on the guy’s motives. Maybe he’ll put the screws to VW even more. I’m just wondering what he realistically could do if he had the desire.
“Why on earth would Trump want to help a foreign company anyway?”
Because he, like many conservatives, will care more about pissing off eco-weenies than actual policy implications of what he does. And letting VW off the hook would be a fine way to do that.
Define “foreign”. Is a Ford built in Mexico foreign or domestic? How about a VW built by Americans in Tennessee?
Think he has been clear on where a Ford built in Mexico falls.
“Volkswagen brand chief Herbert Diess said news of Trump’s win surprised him, but added that his presidency could stand to help the company.”
probably hoping he’ll set aside that whole Dieselgate settlement.
Campaign bluster? He won because of Ohio, Pennsylvania, Wisconsin, Iowa and Michigan(when they finally finish counting votes there, yes that’s a strange place). If he doesn’t deliver on Ford, Nabisco, and Carrier he won’t win a second term as those states will know it was all talk. Trump has to deliver on helping US manufacturing against Mexico and China
I don’t see how he can deliver? In ford’s case at least nobody wants to buy or pay “made in America” prices for a small car at the volume Ford is selling at.
The loss of manufacturing jobs blows but driving the parent company into oblivion just to save some jobs in the short term doesn’t seem particularly bright.
I hope when the NAFTA talk comes up again, it is coupled with talk of repealing regulations. If you say to FoMoCo et al, you’ll pay this exorbitant tariff for Mexican production but we’re repealing/restructuring CAFE so you won’t be forced to produce loss leaders, the bitterness of the pill is reduced.
Campaign rhetoric is designed to get votes. I don’t think anyone who voted for Hope and Change really notices any true change brought about by that administration. Once Trump gets to really understand the Auto industry, he will work with these companies to do what he does best, make deals to his advantage. It is to his ego’s advantage to be seen as a Reagan or Clinton, not a Carter or Ford.
Mr. Obama made plenty of positive changes. Especially for folks like me.
Anyway, Trump will soon tire of the daily grind and pressure of being president (plus the frustration of not getting what he wants just because he says so) and delegate most of the heavy lifting to the political cronies/hacks/suck ups he is now surrounding himself with plus dominionst Pense will gear up to persecute LGBT folks.
Problems solved.
P.S. He better settle the Trump Universy lawsuit before his trial starts up or he may need to beg a pardon from President Obama.
See, April. I said “notices” and you foolishly jumped to the conclusion that I was saying Obama didn’t make any positive changes… for anyone… at any time. Just because I didn’t personally benefit from them, actually paid for of them because I work, doesn’t mean I was against them.
As for President Trump and his supposed homophobia, you really missed the mark. That darned sexist, racist, homophobe announced the first three members of his inner circle. Go look it up.
The biggest challenge for President Trump will be fear mongers of the MSM. Every bad thing that happened while Barry held office was blamed on President Bush. Now the MSM has switched to blame President Trump for the bad and shower Barry with praise for the good.
Oh and what will we all do when Mark Cuban runs against him in 2020?
Personally I am taking the same approach to this election as I have with all the past elections. I will not reject or accept anything that comes out a politician’s mouth. That includes President Trump now that he has become one.
I’ll just leave this here…
http://tinyurl.com/9timestrump (betrayed his followers)
The Republican Senate and House will make sure the automakers are properly taken care of.
Our economy is very much integrated with Mexico and Canada, trying to separate us at this point is very much counterproductive.
In theory, we wrecked our pre-NAFTA economy in part to provide jobs to Mexico and stem the reasons for illegal immigration (i.e. no good jobs in Mexico) and yet the Mexican nation is more unstable in the past few years and possibly more corrupt than in the pre-NAFTA period. One could argue by now curtailing Mexican production, you will introduced further instability in their economy/nation and you’d probably be right, but it seems the country cannot be helped and I see no reason to further degrade ours when it did not produce the desired socioeconomic effect. Honestly what Mexico needs is a popular psychopathic but *patriotic* leader such as the Phillipines’ Duterte to take on the cartels and corruption. A strong leader making progress could lead to a stronger currency and hopefully a more stable economy for the county, and allow them to better absorb the jobs pullout. A new Operation Condor through South America could probably help put a handle on the drug trade as well, but the pendulum swing back is probably going to be severe in such a situation.
on Canada:
“Canada and the U.S. could revert to a bilateral free trade arrangement that excludes Mexico, said Royce Mendes and Avery Shenfeld.”
http://www.cbc.ca/news/business/trump-trade-canada-1.3843322
I could see this happening given the President-elect’s desire for the Keystone pipeline. Mexican oil production peaked in 2004.
https://en.wikipedia.org/wiki/Oil_reserves_in_Mexico
The main import *and* export with Mexico seems to be foodstuffs which I imagine would continue (or somehow be grandfathered in) in any new trade agreement. Other than foodstuffs, Mexico’s main exports to the US were vehicles, electrical machinery, mineral fuels (oil/gasoline I imagine), and optical/medical instruments. The production and assembly positions for everything but mineral fuels are most likely not organic to Mexico and were effectively stolen from US workers, those can now come home.
https://ustr.gov/countries-regions/americas/mexico
Look. What’s going to happen to the auto industry is whatever Trump wants to happen. And he’s said already about a thousand times what that is.
Don’t underestimate his ability to get it done either. He’s jerked a knot in the ass of the entire Republican party. Congress will come along behind him or a third of them will will be on the receiving end of that famous “you’re FIRED” phrase we’ve all heard two years from now.
The other party is extremely weak right now. If they become obstructionists there is a lot of them getting their walking papers in two years.
I believe he will get most of what he wants.
Wow, you REALLY want a Führer in your life.
And Obama and his surrogates haven’t ruled like that? Really?
‘And Obama and his surrogates haven’t ruled like that? Really?”
So…it’s OK for Trump, bad for Obama.
Got it. Thanks for clarifying. And thanks for confirming you failed eighth grade history class.
Mike it’s over, the MSM no longer has the ability to control the elections, stop mimicking their rhetoric and accept it. The people have known for 3 months now that this was going to be a landslide yet MSM kept acting like Hillary was viable.
Gee Hummer I guess the majority of Americans who gave Clinton the greater popular vote didn’t get your memo about the durn lamestream media. Somebody’s wettin’ themselves in excitement about a return of Sarah Palin.
Better than this current economic disaster. We want someone who knows how to do business, and we voted for it.
The idea that Trump, whose lifetime returns are a small fraction of what he would have received from investing in an index fund, “knows business” is hilarious and absurd.
There is one thing he really does grasp well, and it’s branding. Branding is not business and is not very relevant to most of governing.
IBx1, remind us how many times the businesses he owns/controls filed for bankruptcy?
Do things the way I want them done and you are a great leader, do them a different way and you are a Nazi? Fearmongering and college students screaming “NOT MY PRESIDENT” in California shows what the losing party is really made of.
I look forward to your comments in two years when everything about his agenda that is different from the standard Republican agenda has been either blocked by Congress or ignored by his own appointees, most of whom are going to be mainstream Republicans simply because there aren’t any other qualified people to lead agencies (other than Democrats).
He’s going to look like an impotent pile of sputtering orange rage and his party will lose seats in Congress. The structural advantages and the 2018 Senate map mean they will probably keep control of it anyway, but the only agenda items that will go through are the ones all Republicans agree on.
“What’s going to happen to the auto industry is whatever Trump wants to happen.”
Wow, one man control over what private companies make.
I wonder if Trump could grow an orange mustache as wide as his nose…
He’ll just yell YOU’RE FIRED over and over again…
‘Automakers’ may not want tariffs, but the 12 million people in the afl-cio are generally for them (or at least toning down NAFTA and the like). That’s what I gather from AFL-CIO’s website anyway.
It would be a tough line to be pro-Ford (identified as the corporation and it’s executives, and Ford is just an example) AND be pro-Ford employee (identified as proletariat) as seen through the eyes of the voting blocks. I don’t want to get into the argument that being pro-Ford is being pro-Ford employee because they get to keep their jobs if Ford is a going concern. I am, instead, talking of the promises and perceptions of the campaign and how they will play out.
If Trump really had a surprise voting block, it has to be disaffected union laborers.
Blocks don’t vote. But groups, such as voters, can form blocs.
A’ight. but still…
The official spiel I read did not even mention WTO, which is at the heart of the problem, it did criticize Chinese currency manipulation and promised to renegotiate NAFTA. If WTO wants to get stupid and “punish” Trump with tariffs for fooling around with Mexico, it will be them who eats crow as he will simply negotiate new trade treaties. The UK learned quickly many others wanted to do business outside of EU shackles, and the US economy is larger than the UKs.