New Cuban relations may provide a boost for automakers

David Shepardson
Detroit News Washington Bureau

Washington — President Barack Obama’s decision to normalize relations with Cuba may eventually provide a shot in the arm for U.S. automakers who have been barred from selling new cars to the island for a half-century.

Cubans continue to drive tens of thousand of chrome and tail fin Cadillac, Chevrolet, Ford and other U.S. models of the 1950s — largely because the Cuban government has barred the import of nearly all foreign cars for most of the last half-century.

“This announcement is also good news for the U.S. economy. Cuba sits just 90 miles off our coast and has an economy of more than $68 billion. Yet, up to this point, American firms have been forced to cede business to foreign competitors. Of particular interest to my hometown of Detroit, the people of Cuba —who must famously rely on American cars made before 1959 — may soon be able to buy American cars and automotive parts once again,” Rep. John Conyers, D-Detroit, said.

But administration officials said Congress would need to lift the embargo before it could take that step.

Cuba has taken some modest steps to make it easier for its citizens to buy or sell a car — or buy a new car.

After Fidel Castro seized power, only cars owned before 1959 retained full private ownership and new car imports were largely banned. Cubans could wait for years to get government permits in order to buy used cars.

Some Soviet-era cars built in the 1970s on the island — including Ladas — are on the roads, along with some newer largely Asian models imported for government use or by some citizens including doctors and foreign entities.

In late 2011, the Cuban government lifted restrictions of being able to sell a privately owned car.

Last December, Cuba allowed the widespread sale of the first imported cars in decades. But those cars are far more expensive than the same vehicles in the United States or Europe and new cars only can be purchased from the Cuban government.

The Associated Press reported in January that a 2009 Hyundai minivan was listed for sale in Cuba for $110,000.

Patrick L. Anderson of the Lansing-based Anderson Economic Group said “a number of key Michigan industries stand to benefit from opening up relations with Cuba. The auto industry, in particular, will gain an important export market; tourism will shift, with more Michigan residents traveling to Cuba and more Cubans coming here; and agricultural exports and imports will grow,” he said. “Of course, some Americans will look forward to seeing some of the famous examples of American cars from the 1950s and 1960s still running, and I’ll bet at least one of them ends up in the Henry Ford.”

The U.S. Chamber of Commerce has called for ending the embargo.

“We deeply believe that an open dialogue and commercial exchange between the U.S. and Cuban private sectors will bring shared benefits, and the steps announced today will go a long way in allowing opportunities for free enterprise to flourish. In countries around the world, where leaders from across the political spectrum have made a concerted effort to liberalize their economy, we have seen a sharp rise in the quality of life of their citizens.” Chamber President Tom Donohue said.

“It is imperative that the Cuban government build on today’s positive steps with a more ambitious economic reform agenda at home, while we continue to push for the end of the embargo here in Washington.”

U.S. Senator Debbie Stabenow, who participated in a February 2013, congressional delegation to Cuba, issued a statement Wednesday.

“I support the policy changes President Obama announced today because they will boost agriculture, encourage manufacturing, and create jobs in America by increasing our country’s ability to export goods and products, including many made or grown right here in Michigan. I also believe that these actions will serve as the basis for lasting and meaningful political reforms in Cuba that will finally bring freedom to the Cuban people.”