Trump talks to U.S. automakers, pushes for new American plants
WASHINGTON (Reuters) - U.S. President Donald Trump urged the chief executives of the Big Three U.S. automakers on Tuesday to build more cars in the country, pressing his pledge to bring jobs to America and discourage the car industry from investing inMexico.
Trump, who has threatened to impose 35 percent tariffs on imported vehicles, opened a White Housemeeting with General Motors Co CEO Mary Barra, Ford Motor Co CEO Mark Fields and Fiat Chrysler Automobiles NV CEO Sergio Marchionne saying he wants to see more auto plants in the United States.
In return, the new Republican president has vowed to cut regulations and taxes to make it more attractive for businesses to operate in the United States. He promised frequently during his election campaign to be a job-creating president and stressed that message in his inaugural speech last Friday.
"We have a very big push on to have auto plants and other plants - many other plants," he told reporters at the start of the meeting. "It's happening. It’s happening big league."
The auto executives raised the issue of fuel efficiency rules, trade policy and other regulatory issues, a person briefed on the meeting said. Marchionne told reporters after the meeting that Trump did not give them specifics on what regulations he would cut.
The hour-long meeting was the latest sign of Trump's uncommon degree of intervention for a U.S. president into corporate affairs as he has repeatedly pressured automakers and other manufacturers to "buy American and hire American."
With flattening U.S. auto sales and some excess capacity, U.S. automakers have been reluctant to open new U.S. auto plants in recent years. GM and Ford last built new U.S. assembly plants in 2004, while Fiat Chrysler opened a new transmission plant in Indiana in 2014.
But they have expanded operations at existing U.S. plants to meet rising demand for trucks and SUVs. GM, Ford, Fiat Chrysler as well as foreign automakers have announced a string of new U.S. jobs and investments in recent weeks.
Coinciding with Tuesday's meeting, Toyota Motor Corp said it would add 400 jobs and invest $600 million in anIndiana plant, aiming to boost production of a popular SUV by 10 percent.
Ford's Fields said automakers wanted to work with Trump to create a "renaissance in American manufacturing", and said Trump's economic priorities were encouraging, including his move on Monday to formally bow out of the 12-nation Trans-Pacific Partnership (TPP) trade pact that was championed by his predecessor in the White House, Democrat Barack Obama.
"The mother of all trade barriers is currency manipulation. And TPP failed in meaningfully dealing with that, and we appreciate the president's courage to walk away from a bad trade deal," Fields told reporters after the meeting.
Barra said there was a "huge opportunity" to work together with the government to "improve the environment, improve safety and improve the jobs creation."
U.S. automakers have collectively added more than 78,000 jobs since 2009, the year when GM and Chrysler, now a unit of Fiat Chrysler, filed for bankruptcy as part of government bailouts during the U.S. recession. They have invested more than $40 billion in U.S. facilities during that period.
Despite the vocal pressure from Trump, the companies are unlikely to truly change their existing business plans for now, said Sam Fiorani, vice president of global vehicle forecasting with AutoForecast Solutions.
"We need to have more concrete policies from the president," he said. "Automakers will make decisions on whether there is a solid business case,” said Fiorini. "Does it make more sense to build outside the U.S. or to build in the U.S.?"
GM said in 2014 it would invest $5 billion in Mexico through 2018, a move that would allow it to double its production capacity, and Barra has said the automaker is not reconsidering the plan.
While automakers are adding U.S. jobs, they are also cutting U.S. production of small cars. On Monday, GM ended two shifts of production of small cars in Ohio and Michigan, cutting about 2,000 jobs.
Tuesday's gathering was the first time the CEOs of the big three automakers have met jointly with a U.S. president since a 2011 session with Obama to tout a deal to nearly double fuel efficiency standards by 2025. Automakers have urged the Trump administration to rethink those aggressive fuel efficiency mandates.
Barclays auto analyst Brian Johnson said in a note Tuesday that he thinks "automakers will be willing to make a deal that would bring back jobs to the U.S. in return for a slower ramp of (fuel efficiency) targets and related state-level mandates."
Auto stocks rose on Tuesday morning. U.S.-listed shares of Fiat Chrysler rose 6.3 percent to $10.93, while Ford was up 1.6 percent and GM rose 1.3 percent.
Tuesday's meeting included the former Republican governor of Missouri, Matt Blunt, who heads a U.S. automaker trade association. Vice President Mike Pence, White House chief of staff Reince Priebus and other senior administration officials also attended the meeting.
(Reporting by David Shepardson; Additional reporting by Susan Heavey and Bernie Woodall Editing bySoyoung Kim and Frances Kerry)