Trump suggests moving some car production from Michigan

David Shepardson
Detroit News Washington Bureau

Washington — Donald Trump is making the future of U.S. auto production a cornerstone of his campaign for the Republican nomination for president.

Trump disclosed in an interview with The Detroit News Wednesday that Ford CEO Mark Fields wrote to him explaining the automaker’s planned $2.5 billion investment in Mexico after Trump criticized Ford in June. And Trump suggested one way to stop automakers’ expansion to Mexico is by moving some production out of Michigan to lower-wage states.

“I don’t like what’s happening,” Trump said in the 15-minute telephone interview. “We’re losing our jobs. We’re losing our wealth. We’re losing our country ... Why can’t we do it in this country? It’s an incredible thing that we’re not allowed to make our product.”

Trump said he backs government tax incentives to keep auto production in the United States. He said the U.S. shouldn’t open its market to Japanese imports unless it drops trade barriers.

The United States has lost more than 5 million factory jobs since 2000; Michigan has shed more than one-third of its manufacturing jobs since then. In an appeal to blue-collar workers, Trump vows to keep the more than 12 million manufacturing jobs in the U.S.

“We’ve got to keep (factories) here. It’s not that hard to do,” he said. Without action, he added, “pretty soon all we’re going to have is nursing home jobs.”

Trump has repeatedly said that if elected, he would not allow Ford to open a new plant in Mexico. At his campaign announcement speech in New York in June, Trump said he would call Fields to explain the “bad news.”

“Let me give you the bad news: Every car, every truck and every part manufactured in this plant that comes across the border, we’re going to charge you a 35 percent tax,” Trump said. “They are going to take away thousands of jobs.”

It isn’t clear how Trump could legally single out one automaker for punitive taxes.

Ford confirmed that Fields sent Trump an email the day after his announcement speech. Spokesman Karl Henkel said: “Mark sent Mr. Trump an email with information about Ford, including the $6.2 billion we have invested in our U.S. plants since 2011 and our hiring of nearly 25,000 U.S. employees. Mr. Trump thanked us for the information and said that Ford is a great company and that he is a Ford customer. We appreciate his kind words.”

Trump said Fields’ email didn’t change his views about the expansion. He called it a “very, very nice letter,” but said it didn’t justify “how it is going to be good for the United States, because that cannot be justified.”

In April, Ford said it would add 3,800 jobs in Mexico as part of a $2.5 billion investment — on top of the 11,300 Ford already employs in Mexico. The investment will include a new $1.1 billion engine plant that’s part of an existing facility and a new $1.2 billion transmission plant allowing for exports of engines to the United States and elsewhere. Ford also is investing $200 million to expand engines production at another plant in Mexico.

Ford has repeatedly said it is not closing any U.S. plants as a result of its Mexican expansion. On Wednesday, the automaker said it was shifting production of heavy trucks — the F-650 and F-750 — from Mexico to a factory in Ohio.

Last month, Ford said it would end small car production at its Michigan Assembly plant in Wayne. It didn’t say where it would locate production, but some analysts have suggested the work will move to Mexico. The automaker has insisted it has no plans to close the Wayne plant and will add new production.

Asked why he was focused on Ford when other global automakers have announced plans to expand operations in Mexico, Trump said he wasn’t familiar with other automakers’ expansion plans. He planned to mention other automakers, he said, and asked The Detroit News to send information about them.

General Motors Co. in December announced a $5 billion investment in Mexico over six years. GM has four complexes in Mexico with 14 manufacturing plants comprising assembly, engine, transmission, stamping and foundry work which employs about 15,000 people.

Trump asserted that new plants in Mexico will cost jobs.

“Detroit needs a lot of help — and it certainly needs a lot of help when factories are closing to move to Mexico — when you are closing up your car factories in order to build the same factory in Mexico, meaning a modern version of it in Mexico. We just can’t have that. It just can’t happen, and we have to stop it.”

In addition to the Ford and GM expansions, BMW AG, Volkswagen AG and its Audi unit, Nissan Motor Co., Kia Motors, and Fiat Chrysler Automobiles NV are among the automakers that have built or announced new plants or plant expansions.

Many automakers have decided they can’t build small cars profitably in the United States. Auto workers in Mexico make as little as $9 an hour. In addition, Mexico has dozens of free trade agreements around the world, free or nearly free land on which to build, and fewer regulatory hurdles.

Trump dismissed the lower-wages argument.

He said U.S. automakers could shift production away from Michigan to communities where autoworkers would make less. “You can go to different parts of the United States and then ultimately you’d do full-circle — you’ll come back to Michigan because those guys are going to want their jobs back even if it is less,” Trump said. “We can do the rotation in the United States — it doesn’t have to be in Mexico.”

He said that after Michigan “loses a couple of plants — all of sudden you’ll make good deals in your own area.”

Although wages are lower at non-union U.S. plants owned by foreign automakers, hourly employees for Detroit’s Big Three are paid the same no matter what state they’re in, under the terms of United Auto Workers contracts.

Trump also criticized Japan. Japan has boosted auto production in the U.S. dramatically but is still exporting more than 1.5 million vehicles from Japan to the U.S. annually. Last year, the U.S. sent Japan just 23,000 vehicles.

U.S. automakers have long called Japan’s auto market one of the most closed in the world. Trump said the barriers to U.S. auto exports are “ridiculous — and the U.S. says, ‘Oh please, we’re sorry to offend you.’ ”

“Until you open your markets, you’re not selling any more cars over here,” Trump said. “That’s going to force people to build in the United States.”

But Trump has been supportive of the $85 billion auto bailout, telling Fox News in December 2008 he supported a rescue. “I think the government should stand behind them 100 percent. You cannot lose the auto companies. They’re great. They make wonderful products,” he said.

He told The News on Wednesday that GM and Chrysler could have been saved without government bailouts. “I think it would have worked out the other way, too,” Trump said. “It would have been a free-market deal.”

Trump lamented that some products aren’t made in the U.S.

“I just ordered 4,000 television sets — the only place you can buy them is in South Korea,” Trump said. “They all come from South Korea — and Sony, but Sony lost its way.”