For a guy who proposes to be helping American manufacturing and the people it employs, President-elect Donald Trump isn’t doing the auto industry any favors.
His readiness to use Twitter to trash — or congratulate — the investment decisions of mostly Detroit automakers is confounding executives otherwise predisposed to celebrating record sales and the prospect of lower corporate taxes and broad regulatory reform under a Trump administration.
Confusion reigns. Non-confrontational press releases touting billions in investments in U.S. operations are followed by obligatory phone calls to Trump. One ranking industry executive described being immediately connected to a president-elect who is accessible and willing to listen, preferable to the opposite.
“This is new territory for most of us,” Sergio Marchionne, CEO of Fiat Chrysler Automobiles NV, said Monday at the North American International Auto Show. “None of us have had a tweeting president. It’s a new form of communication.
“We’re not going to do anything about President Trump. He was elected president of the United States. I need clarity. I think we all need clarity. If tomorrow morning, the president-elect decides to impose a border tax, we’ll adjust. We’ll adjust.”
He’s not alone. From FCA and Renault-Nissan to General Motors Co. and Ford Motor Co., the emerging consensus on Trump’s penchant for lambasting the industry’s North American investments over the past generation boils down to three words: wait and see.
And, make your case. Yet again, Ford used its Monday press conference to underscore its jobs-creating investments in the United States. Honda Motor Co. pointedly referenced its 40-year history of investment and employment in Ohio. GM CEO Mary Barra reiterated that GM has invested more than $11 billion at home over the past two years and provides more than 100,000 jobs here.
“There’s a lot of work to do,” Barra said, referring to trade and automotive policy. “When you really look at some of the things the president-elect has said, we have much more in common than we have different.”
Toyota Motor Co. CEO Akio Toyoda, scion to the founding family, reminded that Japan’s No. 1 automaker employs 136,000 in the United States, has invested $22 billion here over the past 60 years and expects to invest another $10 billion in the United States over the next five years.
How, exactly, the industry would adjust depends on whether the next administration moves to make good on Trump’s threat to impose a “big border tax” on cars and trucks assembled in Mexico and then exported for sale in U.S. showrooms.
Two major questions loom: at what cost in jobs and future investment. And, second, would tariffs on Mexican-made metal cause such manufacturers as FCA to reassess their investments south of the border. Marchionne, for one, did not rule out the possibility of leaving Mexico “as long as there’s no clarity.”
“Everybody is anxious and everybody is listening,” said Carlos Ghosn, CEO of Renault-Nissan alliance and chairman of Mitsubishi Motor Corp. Trump “said America comes first and I want jobs in the United States. We don’t want to pre-empt anything. The carmakers will adapt to the new rules — if there are new rules.”
The betting — aired privately, of course, lest public complaining provoke another Trump TwitterStorm — is that ranking industry executives will be able to explain their business to the White House. And that more business-savvy members of his cabinet will serve as buffers between the Oval Office and the industry.
Vice President-elect Mike Pence hails from Indiana, a manufacturing state rich in auto plants foreign and domestic; would-be Transportation Secretary Elaine Chao served as secretary of labor in the George W. Bush administration; and Wilbur Ross, Trump’s nominee to be commerce secretary, is experienced in restructuring the steel industry and union contracts.
All three are well-versed in the modern complexity of manufacturing and labor relations in a global age. Together, the thinking goes, they could help educate their new boss on automotive investment and its connections to trade deals as they exist, not as he wants them to be.
Perceptions fueled by jobs-creating investments don’t help. GM’s announcement last month of plans to build autonomous test vehicles in Orion Township, Ford’s decision to scuttle plans for a plant in Mexico and invest $700 million in Flat Rock, and FCA’s move to pump $1 billion into plants in Michigan and Ohio for a new suite of Jeeps suggests each are responding to Trump’s Twitter tirade.
Doesn’t work that way. FCA’s Marchionne said FCA’s moves are “not a pre-emptive strike against a tweet.” But they are a concerted effort to reinvest in the heart of its U.S. operations because “we gotta protect Mother Goose. This is where it all started.”
Detroit’s automakers understand that. The difference is that the guy who’ll soon be in the White House understands that, too, and he’s willing to wield his smartphone to make sure the industry’s decision-makers don’t forget it.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.