FCA CEO addresses Trump tweet, renegotiating NAFTA
Fiat Chrysler Automobiles NV is not making brash changes to its current production plans, as the auto industry waits to see if President-elect Donald Trump delivers on campaign promises of renegotiating trade deals and imposing tariffs on imported vehicles to the United States.
Sergio Marchionne, CEO of the automaker, said if Trump and his administration change the rules, then the company will adjust.
"I think we will adjust, when the rules get changed, if they get changed," he told reporters on the sideline of the Detroit auto show. "We have no choice in this. We are not policy setters."
“It's finally happening — Fiat Chrysler just announced plans to invest $1BILLION in Michigan and Ohio plants, adding 2000 jobs. This after...” Trump tweeted. “Ford said last week that it will expand in Michigan and U.S. instead of building a BILLION dollar plant in Mexico. Thank you Ford & Fiat C!”
The surprise tweet came minutes after Ford at the North American International Auto Show confirmed plans to produce the Ford Ranger midsize pickup and Ford Bronco SUV in Michigan by 2020. And it came a day after Fiat Chrysler announced it would add 2,000 new jobs and invest $1 billion in plants in Michigan and Ohio to produce new Jeep vehicles.
Ford Executive Chairman Bill Ford Jr. on Monday confirmed he spoke with Trump last week, saying he has "frequent conversations with him. He's very accessible, very easy to talk to. I'm very pleased."
Marchionne said he has not spoken with Trump or any of his advisers. He downplayed the tweet, but said he did "appreciate the comment" from the president-elect.
"We haven't forgotten how we got here," Marchionne said referring to the 2009 government-backed bankruptcy of Chrysler that gave control of the company then-Fiat SpA. "We owe a lot to this country."
Marchionne reiterated that the decisions about the investment and jobs were made last year with the United Auto Workers union before the election. He did acknowledge that the company making the Warren plant flexible enough to produce the company’s Mexican-made Ram heavy-duty pickups was to give it options if something drastic does occur.
"There’s no commitment that we are going to move the heavy-duty, let’s be clear," he said. "If tomorrow morning, president-elect Trump decides to impose border tariffs on anything that comes up from Mexico, then we’ll have to adjust."
A major campaign promise of Trump was to end or renegotiate the trade pact with Canada and Mexico, and slap a 10 percent to 35 percent tariff on vehicles and parts made in Mexico that are imported into the United States. He also has threatened tariffs of up to 45 percent exported from China to America.
Joe Hinrichs, Ford’s president of The Americas, on Monday announced that both new Ford models, as previously reported by The Detroit News and others, would be produced at the automaker's Michigan Assembly Plant. The Ranger is expected in 2019, followed by the Bronco in 2020.
Ford discontinued the Ranger, a small truck, in 2011, but newer versions are sold in 180 markets around the world. They currently are built in Argentina, South Africa, Thailand and Nigeria.
Trump last week criticized Toyota Motor Corp. on Twitter for previously announced plans to build some Corolla sedans for the United States in Mexico. It followed him threatening General Motors Co. with a “big border tax” on Chevy Cruze cars built in Mexico and imported for sale in the United States.
GM Chairman and CEO Mary Barra said Sunday the automaker does not plan to change its production plans for the Mexican-built Chevrolet Cruze Hatchback.
Ford last week said it was canceling plans for a $1.6 billion plant, and now will build the car at an existing Mexico factory. It said it plans to invest $700 million at its Flat Rock Assembly Plant and create 700 new jobs in Michigan when it adds production of a new electric small SUV and a self-driving hybrid.
Ford President and CEO Mark Fields cited the cancellation on a shift in buyer preferences as compact car sales have fallen. But he said factors included the pro-business environment it sees in the United States under Trump.
Comments about adaptation by Marchionne echoed those last week of Nissan Motor Co. CEO and Chairman Carlos Ghosn at the CES technology trade show in Las Vegas.
“We’ve seen it in many different markets in the world and we are very pragmatic people,” Ghosn said. “I’m not saying ‘we’ Nissan, ‘we’ all carmakers ... we will adapt to any situation on the condition that this is one rule for everybody.”
Ghosn, also head of French automaker Renault and chairman of Mitsubishi Motors, didn't seem surprised by Trump’s pro-America manufacturing stance. There are “plenty of countries trying to say, ‘If you want to sell cars in our country, you need to build the cars in the country.’ ” He said 95 percent of vehicles sold in China are being produced in the country as well as about 97 percent of cars sold in India that are produced in that country.