Electronics

Trump Considered a Threat to the Mexican Automotive Industry

Trump Considered a Threat to the Mexican Automotive Industryā€¯

Speaking with reporters after the Dearborn auto maker's press conference at the North American International Auto Show in Detroit, Ford Executive Chairman Bill Ford said that he and the incoming president have discussed "trade policies, currency fluctuations, tax policy - all the things that would affect our business". Most automakers have moved production of small cars to Mexico because they can't make them profitably in the U.S.

On Monday, Trump tweeted "it's finally happening", and thanked Ford and Fiat Chrysler for the investments in the U.S.

Asked whether it would be feasible to keep Mexican factories running while re-orienting their production to markets other than the US, Marchionne said that such an adjustment would be "very, very costly and uncertain". He reiterated that the decisions about the investment - as well as making the Warren plant flexible enough to potentially one day produce Ram heavy-duty pickups, which are now made in Mexico - were made past year with the United Auto Workers union before the election.

Automotive exports represent the highest value in the Mexican economy and generate a significant source of foreign exchange for the country.

As the doors opened for the show's media preview, Trump tweeted in celebration of recent announcements by Fiat Chrysler Automobiles and Ford Motor Company that they will expand USA production.

Trump has used Twitter to express himself on assorted subjects, including his desire to see vehicles sold in the U.S. built in the U.S. His Twitter storms can cause industry consternation.

Gas prices at highest level since June 2016
Area prices on Monday were averaging $2.39 per gallon, down from $2.41 a week ago, according to AAA's fuel tracker . How much will depend on oil prices, which are averaging about $20 more per barrel than this time a year ago.

"When the auto companies are targeted, I think they pretty much said, 'You know what, we're going to rethink taking things to Mexico, '"Jim Cramer said on Tuesday's segment of "Squawk on the Street". According to FCA Chief Executive Sergio Marchionne, this investment had already been planned for a long period of time as per Reuters.

Barra explained that GM as a general rule makes cars in the country where they are sold, as is the case in the US and China, but suggested that moving some production overseas will be inevitable. Trump said then and has repeated since that companies that build in Mexico should pay a tariff on those goods. He said the company has invested billions in the USA since the 2008 economic downturn and has thousands of employees here. "Make in United States of America or pay big border tax!"

Trump's ire was not restricted to Ford.

Trump has also turned his attention toward General Motoros with the threat of a "big border tax" over compact cars being made in Mexico. It followed him threatening General Motors Co. with a "big border tax" on Chevy Cruze cars built in Mexico and imported for sale in the United States. "We do a lot of investment here, even vehicle development, so I think we will be fine", he said.

Trump also has expressed his displeasure with the North American Free Trade Agreement, saying it has cost jobs in the U.S.

In November 2016, Macy's CEO Terry Lundgren said he supported the company's decision to discontinue its business relationship with Trump.



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