Trump talks jobs with Detroit's -- but not foreign -- automakers
January 27, 2017
WASHINGTON — President Donald Trump touted his tax-cutting and regulation-reducing agenda in a Jan. 24 meeting with some of his favorite targets: U.S. automakers.
Trump said his goal is to make the U.S. more appealing for manufacturing investments and will seek to lower corporate taxes and simplify regulations.
"We want regulations, but we want regulations that mean something," Trump told leaders of the Detroit Three auto companies, General Motors, Ford, and Fiat Chrysler, as a breakfast meeting got underway at the West Wing of the White House.
Following the hour-long meeting, Ford CEO Mark Fields, GM CEO Mary Barra and Fiat Chrysler CEO Sergio Marchionne told reporters that the meeting was a productive one, with Fields saying Trump "is very focused on policies that will grow investment and jobs here in America … which is what we talked about."
"I think as an industry we’re excited about working together with the president and his administration on tax policies, on regulation, and on trade, to really create a renaissance in American manufacturing," said Fields.
Barra added that she sees "a huge opportunity" for working with the new president to "improve the environment, improve safety and improve job creation."
While Trump has criticized American car makers for being, in his view, too willing to move operations to other countries, especially Mexico, under the North American Free Trade Agreement, he told them before their meeting that the government will try to make it easier to build plants in the United States.
"I want new plants to be built here for cars sold here!" Trump had tweeted before the meeting.
White House Press Secretary Sean Spicer said later that the president discussed with the automakers "regulatory reform and modernized safety standards" and is concerned with "how best to streamline" permitting for manufacturing plants in the U.S., believing that "excessive regulations" are at least partly to blame for them being built overseas.
Trump signed an executive order directing his administration to support U.S. manufacturing "through expedited reviews of and approvals for proposals" and "reductions in regulatory burdens affecting domestic manufacturing."
Spicer also said Trump expects to have Commerce Secretary Wilbur Ross report on how to improve permitting for new plants once he is confirmed by the U.S. Senate.
Also attending the auto meeting was former Missouri Gov. Matt Blunt, president of the American Automotive Policy Council, a trade organization, as well as Trump senior adviser and son-in-law Jared Kushner, chief strategist Steve Bannon and chief of staff Reince Priebus.
Asked at a press briefing why Trump had automakers in on just his second full workday in the White House, Spicer said, "He thinks that (the industry) is vital to our manufacturing base but he’s going to have a lot of meetings."
What wasn’t clear was whether the subject of potential tariffs came up. Trump has repeatedly said that he wants to renegotiate NAFTA to keep more jobs in the U.S. instead of seeing automakers and other manufacturers use low-cost labor in Mexico to maintain profits and has threatened large tariffs to do force them to do so if necessary.
Critics and industry analysts say a large border tariff, such as a 35 percent figure Trump has frequently mentioned, would either lead to higher prices on new vehicles, causing sales to drop, and would lead to financial losses for the automakers.
Fields, Barra and Marchionne also did not say if specifics were discussed as to what a renegotiation of NAFTA, which has been in effect since 1994, would look like or possibly mean to them.
But they singled out Trump’s decision to formally withdraw the U.S. from a multinational Pacific Rim trade deal, the Trans-Pacific Partnership, as being good news for automakers based on their belief that it wasn’t tough enough on Asian countries manipulating their currencies to protect domestic markets.
"We’ve been very vocal both as an industry and as a company and we’ve repeatedly said that the mother of all trade barriers is currency manipulation," Fields said. "And TPP failed in meaningfully dealing with that. We appreciate the president’s courage to walk away from a bad trade deal."
The TPP had effectively been dead for months after Republican leaders said they wouldn’t vote on it, though that only really became the case once Trump — who railed against TPP throughout the campaign — became the de facto nominee.
Car and truck production is among the reasons Trump is pushing changes to U.S. trade policy, claiming other nations are taking advantage of "bad deals" that cost American jobs, even though there is widespread evidence that many auto jobs and other manufacturing jobs over the decades have been lost to productivity gains and technological advancements.
Renegotiating NAFTA could be tricky, though many experts believe an update is due. If talks stray into suggestions about protective tariffs such as Trump has suggested, however, it could make for difficult negotiations.
Free trade has been a hallmark of Republican politics for decades, and some GOP lawmakers have criticized Trump’s approach. They said it would lead to less trade abroad and higher prices abroad, and, in the case of the spiked TPP, will give China too big a say in Asian economies.
"This decision will forfeit the opportunity to promote American exports, reduce trade barriers, open new markets, and protect American invention and innovation," said Sen. John McCain, R-Ariz. "It will create an opening for China to rewrite the economic rules of the road at the expense of American workers."
Following the meeting, reporters asked Marchionne if he minded Trump’s tweets about the auto industry and his targeting it for criticism.
"No," said the ever-casual Marchionne, shrugging.
In recent months, automakers have announced plans to invest billions of new dollars in the U.S. and create thousands of new jobs -- developments for which Trump has, at least in part, taken credit.
However, in nearly every case those investments were either in the planning stages for months or were made possible by changing market conditions, though Fields has said that a belief that Trump will improve the business climate in the U.S. has also played a role in Ford’s decisions.
Earlier this month, Ford announced it would cancel plans to build a $1.6 billion plant in San Louis Posto, Mexico, but still plans to move production of the Ford Focus to an existing plant in Mexico. The automaker also said it would invest $700 million at a plant in Flat Rock and create 700 new jobs there.
Fiat Chrysler on Jan. 8 confirmed plans to invest $1 billion in the U.S. and create 2,000 new jobs as it retools a plant in Warren to make the Jeep Wagoneer and Grand Wagoneer and to make a Jeep pickup in Toledo.
On the eve of Trump’s inauguration, GM announced plans to invest $1 billion more in several U.S. plants and said the investment will create or retain 7,000 factory and information technology jobs in the U.S.