Trump’s auto riffs run afoul of fact checkers, reality
Washington — President Donald Trump overstated his role in the revitalization of the U.S. auto industry during his first State of the Union address on Tuesday night, fact checkers and industry analysts argued.
They say the industry’s recovery pre-dates the Trump presidency and noted the president has chastised automakers for building cars in Mexico and threatened trade rules that they rely heavily on.
Speaking to Republican and Democratic lawmakers, Trump singled out automakers such as Fiat Chrysler Automobiles NV, Toyota Motor Corp. and Mazda Motor Co. for planning to open new auto plants in the United States. The creation of auto factories was one of Trump’s big campaign promises, something he reminded automaker executives about when he met with them in March for a roundtable discussion that included the United Auto Workers president.
“In Detroit, I halted government mandates that crippled America’s great, beautiful autoworkers — so we can get the Motor City revving its engines again, and that’s what’s happening,” Trump said.
“Many car companies are now building and expanding plants in the United States — something we haven’t seen for decades. Chrysler is moving a major plant from Mexico to Michigan. Toyota and Mazda are opening up a plant in Alabama — a big one — and we haven’t seen this in a long time. It’s all coming back.
“Very soon, auto plants and other plants will be opening up all over the country. This is all news Americans are totally unaccustomed to hearing — for many years, companies and jobs were only leaving us. But now they are roaring back. They’re coming back. They want to be where the action is. They want to be in the United States of America. That’s where they want to be.”
The popular fact checking website, Politifact.com, rated Trump’s statements about the auto industry “half-true,” saying FCA is not planning to close the plant in Mexico as the president implied to his national audience.
“Chrysler does plan to spend $1 billion to shift production of Ram trucks from Saltillo, Mexico, to Warren, Mich., in 2020,” the website said. “But the Mexican plant will start making another kind of vehicle, and the company expects no change in the number of workers there.”
Fact checkers at CNN also noted the auto industry’s recovery pre-dates Trump’s presidency.
“The auto industry’s recovery began years ago,” the network wrote in an article that was posted on its website. “If anything, the comeback has lasted so long that it’s starting to level off: U.S. car sales fell in 2017 for the first time since 2009, coming in at 17.2 million vehicles. They had set a record in 2016 of 17.6 million cars sold.”
The auto industry is widely regarded to have started its comeback after former President Barack Obama forced General Motors Corp. and Chrysler Group LLC to go through bankruptcy protection in 2009 to clear out debt. Obama and his predecessor, President George W. Bush, floated nearly $80 billion in loans to Chrysler, GM and their lending arms of which $9.26 billion wasn’t repaid.
Auto sales recovered from the recession, setting a historic streak of seven consecutive years of increasing sales and hitting a record of 17.55 vehicles in 2016. Sales slipped 1.6 percent to 17.2 million last year and are expected to fall further this year but remain high by historic standards.
Michelle Krebs, executive analyst for Autotrader, said automakers would probably say the Trump presidency has produced a mixed bag for them so far. “Some credit is deserved, some seemed a stretch and some used not quite accurate information,” she said in an email.
Krebs added that “automakers seem happy with passage of tax reform and relaxation of regulations” and “passage of tax reform should give new-vehicle sales a lift.”
But Krebs said Trump’s statement “many car companies are now building and expanding plants in the United States, something we haven’t seen for decades” is not true. “Domestic and foreign automakers and their suppliers have been investing billions in U.S. facilities — plants, R&D centers — for decades, and particularly since the U.S. emerged from the Great Recession,” she said.
Krebs also noted that automakers are still waiting for a conclusion to North American Free Trade Agreement negotiations and are eager for a $1.5 trillion infrastructure package that Trump touted in his speech, although the president did not reveal how he intends to pay for it.
Reaction to Trump’s remarks about the auto industry were split among Republicans and Democrats in the Michigan Congressional delegation.
Republican Rep. Bill Huizenga of Zeeland welcomed Trump’s emphasis on the economy and auto industry. “When he’s talking about getting Detroit’s engines revving again, you know you’re getting a lot of thumbs up throughout the state,” Huizenga said.
But Rep. Sander Levin, D-Royal Oak, noted that despite Trump’s talk about industry returning from Mexico, the South Korean automaker Kia has decided to expand production 40 percent in Mexico.
“It reminded me of one of his campaign speeches. That kind of manipulation. I was angry but also sad,” Levin said.
Trump also threatened “border taxes” for automakers who build cars in Mexico and singled out companies for production plans that called for building smaller vehicles outside of the country. The president is currently trying to renegotiate NAFTA.
Earlier this month, FCA said it would invest $1 billion at its Warren Truck Assembly plant to bring production of its Ram Heavy Duty truck to the United States from Mexico. The move would add 2,500 jobs in Metro Detroit by 2020, when the plant retooling is completed, the automaker said.
Trump’s auto push has produced few results so far beyond an initial crop of production plans that were in some cases in place months before the election.
In March 2017, Trump announced he was reopening a review of Obama-era fuel economy rules when he visited the future testing site for self-driving vehicles at Willow Run. The Obama administration in its waning days locked in standards requiring automakers to produce car and truck fleets averaging 54.5 miles per gallon by 2025.
The industry asked the Trump administration to reinstate the review of fuel economy regulations, saying the Obama administration acted prematurely in cutting the review short a year ahead of the April 2018 deadline.
Staff writer Melissa Nann-Burke contributed to this report.