Trump threatens GM to stop vehicle imports from Mexico

Ford Motor Co. canceled plans for an auto plant in Mexico as President-elect Donald Trump made it clear he intends to pursue a strategy of economic nationalism.    President-elect Donald Trump took to Twitter Tuesday morning to criticize General Motors for importing cars from Mexico, doubling down on campaign rhetoric about job losses due to the North American Free Trade Agreement that has many business leaders worried about operations that depend on trade with Mexico.
   Meanwhile, Ford Motor Co. announced it was canceling plans for a $1.6 billion assembly plant in San Luis Potosí.
   “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers tax-free across border. Make in U.S.A. or pay big border tax!” Trump tweeted. On Dec. 29, Trump also reinforced he will pursue a strategy of economic nationalism, tweeting: “My administration will follow 2 rules: Buy American and Hire American.”
   GM announced the day after the election that it was shutting down its third shift at the Chevy Cruze assembly plant in Lordstown, Ohio, because of slowing demand. Lordstown is in a traditional Democratic county that switched to Trump in the presidential election. The third shift employs about 1,200 people.
   GM issued a statement pointing out that it makes most Cruze units in the United States.
   “General Motors manufactures the Chevrolet Cruze sedan in Lordstown, Ohio. All Chevrolet Cruze sedans sold in the U.S. are built in GM’s assembly plant in Lordstown, Ohio. GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S.,” it said.
   GM sold about 190,000 Cruzes in the United States in 2016, and about 4,500, or 2.4 percent, were hatchbacks made in Mexico, according to CNBC.
   Mexico is attractive as an export platform because it has more than a dozen bilateral and multilateral free trade agreements allowing low duty treatment for products in 44 countries.
   Trump took a strong protectionist stance during the election season, saying he would slap high tariffs on Mexican goods until the trade deficit with Mexico is corrected and that U.S. companies manufacturing on the other side of the southern border could be targeted with 35 percent import tariffs. During the campaign, he named Ford Motor Co. as an example of corporations turning their backs on America in favor of Mexico. After post-election discussions with Trump, Ford officials said they reversed a decision to move production of the Lincoln MCK crossover sport-utility vehicle to Mexico to make more room for production of the Escape at its Louisville plant.
   Trump told the Detroit News in September that companies needed to feel some consequences for moving production overseas.
   Trump recently named GM CEO Mary Barra to a strategic and policy forum designed to gather advice from business leaders on economic development.
   Last month, GM announced investments of $552 million to upgrade key engine and vehicle manufacturing facilities in Tonawanda, Lockport and Rochester, N.Y; and Parma, Ohio. GM said the investments will help preserve 1,337 jobs and create 67 new jobs.
   Many business leaders expressed cautious optimism that Trump would take a more pragmatic approach to NAFTA and trade with Mexico because the U.S. and Mexican economies are so intertwined.
   Ford on Tuesday announced it was canceling plans to build the auto plant in San Luis Potosi, Mexico, and instead, will invest $700 million at its Flat Rock, Mich. assembly plant to produce electric and autonomous vehicles. The investment will create 700 additional jobs, the company said. Ford said it will build an all-new electric SUV at the plant to be sold in North America, Europe and Asia, as well as a high-volume autonomous vehicle designed for commercial ride-hailing or ride sharing, starting in North America.
   Part of Ford’s trade off on costs is to move the production of the next-generation Focus to an existing plant in Hermosillo, Mexico, making way for two new products to be built at its Wayne, Mich. assembly plant and safeguarding about 3,500 jobs.