The truth behind Trump, the auto industry and Mexico

The truth behind Trump, the auto industry and Mexico

DETROIT -- Automakers used to complain their economic and technological importance were underappreciated, but after having been singled out by President Trump about their operations in Mexico and other nations, they already praying for a return to anonymity.

Trump did not mention automakers specifically in his inaugural address on Friday, taking a break after taking them to task repeatedly in tweets about the need to bring jobs back to the U.S. But they have already learned how to succeed in the new political environment: Facing the president’s willingness to criticize individual companies, smart automakers will package their investment plans in ways aimed at delighting the White House.

As a starting point as President Trump begins his first full week, here's where the industry stands on key issues involving the new administration:.

Statement: Ford cancelled a $2.6 billion plant in Mexico to make the Focus compact and brought the work back to America.

Reality: Ford cancelled plans to build a new assembly plant in Mexico. Bad news for Mexico, but not necessarily good news for the United States. The move, however, didn't prevent the moving of production of the Focus compact car from Michigan to Mexico. Ford just won't go to a new plant there. Instead, Focus will be built at a plant that the Ford opened in 1986 during the Reagan administration, seven years before the North American Free Trade Agreement was passed.

Statement: Moving Focus production to Mexico would have cost American jobs.

Reality: The Wayne assembly plant in suburban Michigan that built the Focus and other small cars is converting to build the midsize Ranger pickup and Bronco SUV. The plant’s workers will be idle during the changeover, but their jobs should be more secure when they start making the trucks, which are likely to be more popular and profitable than small cars. The Ranger goes on sale next year, the Bronco in 2019.

Statement: Detractors have charged that the U.S. doesn’t export enough vehicles and we’re losers in the global market.

Reality: U.S auto exports hit a record 2.7 million in 2016, says John McElroy of TV’s Autoline. America ships vehicles to 150 countries around the world. Wards Auto reports our largest trading partners are Canada: 969,000; China, 266,000; Mexico, 225,000; and Germany, 176,000.

American-based companies build millions more vehicles around the world, the great majority of which they sell in the markets where they build them.

Statement: GM should build the Chevrolet Cruze hatchback in the U.S., not Mexico

Reality: There probably wouldn’t be a Cruze hatchback if GM had to build it in the United States. The Cruze hatch is the poster child for why interconnected global manufacturing footprints make automakers stronger. Chevy sold about 184,300 Cruze sedans in America last year – all built in Lordstown, Ohio. It brought 4,500 hatchbacks in from Mexico. GM wouldn’t have invested millions of dollars for that few vehicles at its plant in Lordstown, Ohio, but it makes sense to build them in Mexico, where that body style is popular and they sell well.Without Mexican production, the 4,500 Americans who bought Cruze hatchbacks might be lost to other car brands.

Statement: Germany should buy more American cars

Reality: Germans already buy hundreds of thousands of cars GM and Ford make in Germany. The automakers have struggled for years to get their European arms back in the black, an effort that won’t be helped by German Minister of economics and Vice Chancellor Sigmar Gabriel's tart response that Americans should “build better cars.”

Original Article www.usatoday.com

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