The truth behind Trump, the auto industry and Mexico – Detroit Free Press
DETROIT — Automakers used to complain their economic and technological importance were underappreciated, but after having been singled out by President Trump over their foreign operations, car companies already praying for a return to anonymity.
Trump did not mention automakers specifically in his inaugural address on Friday, taking a break after taking them to task repeatedly in tweets about the need to bring jobs back to the U.S.
Facing the president’s willingness to criticize individual companies, smart automakers will package their investment plans for White House consumption.
Given the attention President Trump’s stream of consciousness auto analysis receives, a reality check is in order.
Here’s where we stand as the new administration begins.
Statement: Ford cancelled a $2.6 billion plant in Mexico and brought the work back to America.
Reality: Ford cancelled plans to build a new assembly plant in Mexico. Bad news for Mexico, but not good news for the United States. The Focus compact car Ford was moving from Michigan to the new plant will now move to another Mexican plant Ford opened in 1986, during the George H.W. Bush Administration, seven years before NAFTA was passed.
Statement: The U.S. doesn’t export enough vehicles and we’re losers in the global market.
Reality: U.S auto exports hit a record 2.7 million in 2016, says John McElroy of TV’s “Autoline This Week.” We ship vehicles to 150 countries around the world. Wards Auto reports our largest trading partners are Canada: 969,000; China, 266,000; Mexico, 225,000; and Germany, 176,000.
American-based companies build millions more vehicles around the world, the great majority of which they sell in the markets where they build ‘em.
Statement: GM should build the Chevrolet Cruze hatchback in the U.S., not Mexico
Reality: There probably wouldn’t be a Cruze hatchback if GM had to build it in the United States. The Cruze hatch is the poster child for why interconnected global manufacturing footprints make automakers stronger. Chevy sold about 184,300 Cruze sedans in America last year – all built in Lordstown, Ohio. It brought 4,500 hatchbacks in from Mexico. GM wouldn’t have invested millions of dollars for that few vehicles in Lordstown, but it makes sense to build them in Mexico, where that body style is popular and sells well. Mexico also has trade treaties with other countries that let it export Cruze hatchbacks there, countries the U.S. doesn’t have trade deals with.
Without Mexican production, the 4,500 Americans who bought Cruze hatchbacks might be lost to Chevrolet, customers of some other brand.
Statement: Moving Focus production to Mexico cost American jobs.
Reality: The Wayne assembly plant in suburban Michigan that built the Focus and other small cars is converting to build the midsize Ranger pickup and Bronco SUV. The plant’s workers will be idle during the changeover, but their jobs should be more secure when they start making the trucks, which are likely to be more popular and profitable than small cars. The Ranger goes on sale next year, the Bronco in 2019.
Statement: Germany should buy more American cars
Reality: Germans already buy hundreds of thousands of cars GM and Ford make in Germany. The automakers have struggled for years to get their European arms back in the black, an effort that won’t be helped by German Minister of economics and Vice Chancellor Sigmar Gabriel’s tart response that Americans should “build better cars.”