During his campaign for presidency, Donald Trump has threatened to renegotiate NAFTA and tighten up trade with Mexico, a market where both Ford and GM seek to expand in the coming years. But despite the potential negative consequences a Trump presidency may have on these automakers, they are taking the election results in stride, at least publicly.
“GM congratulates both candidates and parties on their hard-fought campaigns.GM looks forward to working with President-elect Donald J. Trump and the new Congress on policies that support a strong and competitive U.S. manufacturing base,” the automaker said in a statement, adding that it “will continue to do its part to transform the future of mobility and contribute to America’s competitive strength.”
Ford, which has been the most prized red circle on Trump’s target board, told Motor Trend, “We congratulate the President-elect and new governors, members of Congress and elected officials across all levels of the U.S. government. We agree with Mr. Trump that it is really important to unite the country – and we look forward to working together to support economic growth and jobs.”
At the beginning of his campaign, Trump threatened to stop Ford from opening a new plant in Mexico, even saying he would impose tariffs on its cars shipped over here. Recently, Ford said it would move all of its small car production from the U.S. to Mexico over the next few years, substituting the cars with new products. Trump famously suggested Ford would “fire all of their employees in the United States,” to which Ford CEO Mark Fields retorted that no American jobs would be lost in the production shift.
The president-elect has also expressed discontent at GM’s decision to spend $5 billion to expand its operations in Mexico. Just today, however, GM announced it would lay off 2,000 people and cut a shift at two of its factories due to slow sales. The affected plants include Lordstown, Ohio, which produces the Cruze, and Lansing, Mich., which builds Camaros and Cadillac sedans.
If Trump’s protectionist policies see the light of day, small cars made in Mexico and shipped to the U.S. could become less appealing to U.S. consumers. Prices could go up $5,000 or more, warned Charles Chesbrough, senior economist at Original Equipment Suppliers Association, speaking with Reuters.
While Ford and GM may have reason to worry, the mining and heavy equipment industries could benefit greatly. Investors are predicting that Caterpillar could benefit from Trump’s plans to curtail regulation in the coal industry. Shares for the company increased nearly 7 percent earlier today.
Source: GM, Ford, Reuters
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from Motor Trend http://www.motortrend.com/news/ford-gm-react-trump-win/
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