Trump Takes Aim at GM, Ford Cancels New Plant in Mexico

Inauguration day doesn't happen for another 17 days, but the auto industry is already starting to see the effects of the Donald Trump presidency. Today had one big threat from Trump to General Motors and one big announcement from Ford, who have just canceled recently made plans to open a new plant in Mexico.

The threat to General Motors came (as is normally the case at this point) via twitter, with Trump condemning GM over Mexico-assembled Chevrolet Cruze models, and adding "Make in U.S.A. or pay big border tax!" GM was quick to issue a statement that "all Chevrolet Cruze sedans sold in the U.S. are built at GM’s assembly plant in Lordstown, Ohio," with only the recently arrived and small sales volume (in the US) hatchback being built in Mexico. Despite GM's quick reply, the threat of import taxes on vehicles is a serious concern for not just automakers with plants in Mexico, but for a large section of Canadians employed by automakers, their suppliers, or associated companies. We have already discussed the danger of new import taxes, along with how the Canadian auto industry could be affected if Trump follows through on threats to repeal the North American Free Trade Agreement.

 

Ford has also made announcements of changes that, while not directly referencing Trump, are likely Trump-related. Along with today's announcement of a Hybrid Mustang and F-150, Ford announced that they are canceling a new $1.6 billion (US) assembly plant in Mexico in favour of investments in the US. The plant was already under construction and was only announced earlier in 2016. Production of the Ford Focus was supposed to move to the new plant but is instead going to an existing Mexican plant where Fusion and Lincoln MKZ are now built. It's not clear if those two cars will return to Michigan or remain in Mexico. The Michigan assembly plant currently making the Focus will now produce "two new iconic products" according to Ford. Their new electric SUV will be built in Flat Rock, Michigan, garnering a $700 million (US) investment over the next four years. Trump had previously threatened Ford with a 35 percent tax on vehicles the company imports from Mexico and waiting to build a new plant until that issue is resolved is a safe decision.

Trump threatens Cruze hatchback while Ford is increasing capacity in the US. 1/3/2017 4:22:06 PM