The heads of major suppliers in the auto industry are looking for clarity and stability from a new presidential administration that, to date, has offered little of either.
Despite Donald Trump’s meetings with leaders of the country’s top manufacturers — including the Detroit Three —the supporting network of parts suppliers remain uncertain of what’s to come. Tuesday, during a meeting on mobility issues hosted by the Detroit Economic Club, the heads of three major auto suppliers offered their takes on what they need from the Trump administration.
Matt Simoncini, president and CEO of Lear Corp., said the absence of details on everything from the president’s border policies to the definition of “imports” leaves companies unable to plan and focus resources.
“What we need is clarity of policy and time to react,” he said. “What we have right now is a bunch of vague comments, vague policies, a tax program where we’re not really sure how it’s going to impact us.”
A lack of specifics is particularly concerning with a president who does not always provide advance notice of major policy decisions. Trump’s executive order on travel restrictions created chaos at airports around the world.
Without specifics, Somoncini said, companies can’t prepare. A massive project along the U.S. border, such as construction of a wall, would be something the industry would like to brace for.
“Infrastructure spending typically drives demand for light vehicles and trucks...,” Somoncini said. The industry needs “time to react” lest it wind up at a “competitive disadvantage.”
David Dauch, chairman and CEO of American Axle & Manufacturing, said his concerns go beyond trade and renegotiating NAFTA: “It’s the whole tax-reform strategy… the trade-reform strategy, an energy policy that’s good for this country, an environmental policy that’s good for this country, a labor environment that’s competitive for us.”
The president’s America First policy may force companies to make hard choices.
“Our policy is that we like manufacturing our products where the product is being consumed ... whether that’s here in the U.S., whether that’s in Mexico, whether that’s in China or Europe,” Dauch said.
Trump’s willingness to reach out and speak directly to business leaders is a positive, said James Verrier, president and CEO of Borg Warner. At the same time, he said he wants Trump to leave progress made on Corporate Average Fuel Economy standards alone.
“Do not slow down the pace on CAFE standards,” he said. “We’ve come a long way as an industry and we need to keep going forward. Don’t go backwards and don’t slow down.”