Donald Trump vs. America's automakers
There's no denying that automakers are feeling the heat from the president-elect's criticism
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Car companies are desperate to get on the good side of the president-elect, said Bernie Woodall and David Shepardson at Reuters. For months, Donald Trump has threatened to slap big tariffs on cars built in Mexico and has scolded U.S. automakers — sometimes inaccurately — for not building more cars domestically. All that criticism appears to be sinking in. Fiat Chrysler said this week that it will invest $1 billion in two Midwestern plants and create 2,000 U.S. jobs; Ford announced last week that it would scrap plans to build a $1.6 billion plant in Mexico and instead invest $700 million to upgrade one of its Michigan plants, hiring 700 workers in the process. Although "both companies have said they made the decision for business reasons and not because of pressure from Trump," there's no denying that automakers are feeling the heat. Talk of Trump's arm-twisting is dominating this week's Detroit Auto Show, said Bill Vlasic and Neal Boudette at The New York Times. With a few admonishing tweets, the president-elect "has changed the focus of the show from what new vehicles are on display to where they are made."
Automakers certainly aren't relishing the attention, said Jamie Butters and David Welch at Bloomberg. Building more cars in Mexico has been a key strategy in recent years, especially when it comes to small cars made for overseas customers. Beyond that, automakers crave predictability "in an industry where billion-dollar factories take years to build and some products hardly change over a half decade." Forecasting "fickle consumer tastes" is difficult in the best of times; the floor at this year's Detroit Auto Show, for instance, is filled with fuel-efficient passenger cars and sleek electric coupes, even though American drivers are once again flocking to gas-guzzling SUVs. Automakers committed to the environmentally friendly models five years ago when gas was $3.60 a gallon. Now it's beginning to dawn on executives that "divining the future will only get tougher under President Donald Trump."
"The political dance going on between Donald Trump and Detroit actually has a lot of upside for Detroit," said Holman W. Jenkins Jr. at The Wall Street Journal. Automakers desperately want relief from the Obama administration's "onerous" fuel-efficiency mandates, which companies are trying to meet with as little expense as possible. Trump's transition team, meanwhile, is sending "strong signals" that automakers will see regulatory burdens relaxed, provided Detroit goes along with the president-elect's jobs agenda. This game of quid pro quo "is a lot more conventional than it appears." What's striking is the "paltry" number of jobs actually involved in these moves, said Nicholas Clairmont at The Atlantic. Trump has already taken credit on Twitter for Ford's and Chrysler's recent announcements; never mind that those decisions were probably underway well before he was even elected. But ultimately we're talking about roughly 3,000 new jobs so far, about the same number the U.S. economy added "in one-third of one average day of August 2016, a strongish month for the recovery." More worrisome? That American companies feel they have to "curry favor with the president-elect" at all in order to conduct business.