US President Donald Trump met with the heads of the leading carmakers in the US and emphasized the need to build more cars in America.
Trump Urges for More Vehicles to be Built in America in Car Chiefs Talks
Mr. Trump, in his meeting with top US carmakers said he would provide tax cuts and champion regulations to make investments in the auto industry more attractive.
He said to reporters at the meeting, “We are really pushing for auto plants and other factories.”
The meeting involved the newly inaugurated US president, Sergio Marchionne of Fiat, Mark Fields of Ford and Mary Barra of General Motors.
Previously, Mr. Trump had taken to Twitter to criticize automakers who have or are planning to take operations to Mexico and other countries and then use the tariff free provisions to import vehicles into the US.
The meeting, held on Tuesday, was the president’s first with the CEOs of auto manufacturers and was a strong gesture to reiterate his mantra of ‘buy American, hire American.’
According to reports, the car chiefs raised pertinent issues such as trade policy and regulations on fuel efficiency.
After the hour long meeting, Mr. Machionne of Fiat told reporters that Mr. Trump was not specific about the regulations he would remove to ensure car manufacturing was revived or brought back to the US.
In the past few weeks, major car manufacturers including Fiat Chrysler, Toyota, Ford and GM have announced new job openings. In particular, Toyota announced that it would invest up to $600m in a plant in Indiana and add 400 jobs in a move to increase production at the site by 10%. The Japanese automaker has previous said that plans are underway to invest up to $10bn in America over the next five years.
A report by Reuters claims that US vehicle makers can be credited for over 78,000 jobs and have invested more than $40bn in the last eight years in spite of GM and Chrysler filing for bankruptcy in 2009 at the height of the economic recession.
Brian Johnson, a car industry analyst at Barclays said that carmakers would be more eager to bring back jobs to the US and make a deal toward this end if regulations on fuel efficiency targets were reviewed and made less stringent.
However, efforts by Trump to expand the car manufacturing industry in the US may not be as easy as issuing permits and making changes to environmental regulations, according to Kristin Dziczek, director at the Center for Automotive Research.
Dziczek asserted that the economic conditions in Mexico were more favorable in terms of hiring employees and building plants given that there are fewer barriers to trade and labor is much cheaper. Importantly, automakers know their businesses will outlive a single president and therefore they cannot afford to swerve back and forth based on political changes.