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Automakers reach out to Trump despite trade threats

Published:Sunday | November 13, 2016 | 12:00 AM

The United States auto industry extended an olive branch last Wednesday to Donald Trump even as it awaited further clues on whether the president-elect will follow through on campaign threats to end trade agreements.

The nervousness was reflected in auto-related stocks, which fell, but not by a lot, shortly after the market opened. Among Detroit's Big 3, Ford was down 2.8%, General Motors was off 4.4%, and Fiat Chrysler fell 4.1%.

The auto industry will be watching closely to see whether Trump immediately moves to end the North American Free Trade Agreement (NAFTA), which has become a cornerstone of the auto industry's opening of many plants in Mexico to take advantage of low labour rates and less regulation.

Ford Motor, in particular, was singled out by Trump during the campaign for telling investors that it has relocated all its small-car production to Mexico even though the automaker says the move didn't cost a single American job.

Ford was quick to offer its congratulations last Wednesday both to Trump and the new Congress and indicate that it is ready to work with the president-elect on matters related to jobs and economy.

"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 statement read.

General Motors emphasised the importance of US manufacturing in its message.

"GM looks forward to working with President-elect Donald J. Trump and the new Congress on policies that support a strong and competitive US manufacturing base," the statement said. "GM will continue to do its part to transform the future of mobility and contribute to America's competitive strength."




The auto industry has become increasingly global, with parts and cars being made around the world and shipped to different markets. And largely because of NAFTA, almost a dozen automakers have located plants in Mexico, shipping cars for sale in the US.

They include not only Ford and General Motors, but a raft of Asian and German makers, from Toyota and Honda to Volkswagen.

Trump took issue with his perception that auto jobs were fleeing the US during his debates with Democratic nominee Hillary Clinton.

"Our jobs are fleeing the country. They are going to Mexico," Trump said during one debate. "So, Ford is leaving thousands of jobs. Leaving Michigan, leaving Ohio. They are all leaving."

Ford did its best to mend the damage during the campaign, with CEO Mark Fields taking a personal role to get out in front of the issue.

At one point, Ford tweeted, "Ford has more hourly employees and produces more vehicles in the US than any other automaker." It showed a graphic indicating 28,000 US jobs added in the US.

The United Auto Workers (UAW) union backed the effort, agreeing with Ford that US jobs were not at stake. And on Wednesday, UAW President Dennis Williams also sought unity after the election. "We have high hopes that elected officials heard the American people loud and clear about trade, jobs, education, and the inequality in this country," Williams said in a statement.