Foreign automakers await their turn to address Trump

Michael Wayland
The Detroit News

Although President Donald Trump has made trade and auto jobs among his top priorities during his first few days in office, he has not yet focused his demands on the automakers that sell the most vehicles in the United States.

The Republican president invited to a Tuesday meeting the CEOs of Detroit’s traditional Big Three automakers and had Ford Motor Co. President and CEO Mark Fields at a Monday meeting with other businesses. But Trump did not invite to Tuesday’s meeting the heads of the so-called “foreign automakers” who sell more than 9.5 million cars and trucks in America and employ tens of thousands of workers.

Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. — the three largest automakers by U.S. sales headquartered in other countries — each confirmed to The Detroit News this week that their officials were not invited to the meeting of automotive minds that included Fields, General Motors Co. Chairman and CEO Mary Barra and Fiat Chrysler Automobiles NV CEO Sergio Marchionne.

“Nissan has positive working relationships with governments and leaders around the world, and given the importance of the U.S. market for our business, we look forward to a continued productive relationship in the United States,” Nissan said in response to questions.

South Korean automaker Hyundai Motor Co. also confirmed it was not invited to the meeting. Hyundai, which touts that it sells about 60 percent of its vehicles in the United States, employs thousands of people domestically. It includes about 3,500 in its manufacturing operations.

Others, including Volkswagen AG and Kia Motors Corp., did not respond for comment.

The White House declined to directly answer if Trump plans to hold a meeting with leaders from foreign automakers, saying officials will let The News “know when we have something to report.”

Non-domestic automakers accounted for 55 percent of sales in 2016, including 9 percent for European automakers and 46 percent for Asian automakers, according to Autodata Corp. This compares with 45 percent for “traditional domestic” automakers, including California electric vehicle manufacturer Tesla Motors Inc., that combined sold nearly 7.9 million vehicles.

Trump has mostly focused his Twitter and public comments at the Detroit automakers, urging them to move production of vehicles from Mexican factories or face a tariff of up to 35 percent, compared with no tariff under the North American Free Trade Agreement. In the first days of his administration, Trump issued an executive order indicating he wants to renegotiate the NAFTA deal with Canada and Mexico.

But in early January, the former businessman criticized Toyota for planning to build Corollas for the U.S. market at a new plant in Mexico.

Trump tweeted: “Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax.”

Toyota fired back quickly that “production volume or employment in the U.S. will not decrease as a result of our new plant in Guanajuato, Mexico, announced in April 2015.”

“Toyota has been part of the cultural fabric in the U.S. for nearly 60 years,” the company said in a statement. “With more than $21.9 billion direct investment in the U.S., 10 manufacturing facilities, 1,500 dealerships and 136,000 employees, Toyota looks forward to collaborating with the Trump Administration to serve in the best interests of consumers and the automotive industry.”

The three Japan-based companies combined sold more than 5.65 million vehicles domestically in 2016, or a little less than a third of the 17.55 million vehicles sold. They employ about 92,000 workers at more than 30 sites across the country, but that number excludes indirect employment such as dealers and includes some non-auto business for Honda.

The Detroit automakers employ about 242,000 people in the United States.

The foreign automakers contribute to the U.S. economy through billions of dollars in investments and spending by their workers. The American International Automobile Dealers Association, a trade association representing America’s international nameplate auto franchised dealers, reports their 9,500 dealers employ 570,000 Americans with an annual payroll of $32 billion.

Libby Newman, a spokeswoman, said the association also has not yet spoken with the new administration.

“We would welcome the opportunity to talk with Trump or anyone in the administration about the positive impact international nameplate dealers have on their communities and the economy,” she said.

Alan Deardorff, professor of public policy and economics at the University of Michigan, said he wasn’t surprised that any new president would meet exclusively with American companies.

“Even if he weren’t Trump, any political figure in the U.S. wouldn’t want to be seen catering to foreign companies. … The economic argument is strong, but the optics are bad,” Deardoff said, adding that it would unwise if Trump “does anything to (exclusively) disadvantage foreign companies.”

Despite the lack of contact with Trump, foreign automakers seem to have responded to his call for more U.S.-based jobs.

Toyota announced Tuesday it will invest $600 million and add 400 jobs at an assembly plant in Princeton, Indiana, the state where Vice President Mike Pence formerly was governor. The investment is part of a $10 billion spending plan over five years that the carmaker announced earlier this month to expand and modernize its U.S. factories, according to a company statement.

Hyundai and affiliate Kia last week said it planned to spend $3.1 billion in the U.S. in the next five years.

Several automakers also highlighted investment and jobs in America earlier during and around this month’s North American International Auto Show in Detroit.

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Twitter: @MikeWayland

Staff Writers Keith Laing and Ian Thibodeau contributed