Plenty of targets left for Trump
Donald Trump’s Twitter-fuelled bid to crimp free trade in the auto industry began with a warning to Detroit’s Big 3 about building factories south of the border. Later, he fired off threats to German automakers- specifically BMW, which is far along in completing a plant in San Luis Potosi, Mexico, that’s set to churn out 150,000 cars a year.
But as the Republican president- elect takes office Friday — and potentially makes good on a promised 35 per cent tariff on vehicle imports — some sizable auto industry targets for his Internet ire remain.
Load up the 140-character word cannon — here’s where Trump may be aiming next.
BLAME CANADA
The heart of the U. S. auto industry may be in Detroit, but much of its muscle lies just across the river in Windsor, Ont. That’s where almost 6,000 Fiat- Chrysler workers bolt together the Chrysler Pacifica minivan and Ram pickups. All told, Ontario assembly plants have about 27,000 autoworkers, including 5,600 people assembling Chevrolet SUVs and the sporty Camaro at two GM plants. There’s also some 7,000 folks at two Toyota installations, stamping out Lexus RX crossovers, Corolla sedans, and RAV4 trucks.
That’s almost one assembly worker for every five in the U. S. When it comes to vehicles, the U. S. trade gap with Canada is larger than with Mexico — US$ 28.6 billion in the first 11 months of 2016, versus US$18.3 billion.
BITS AND PIECES
A car itself, however, is just one product in a sprawling supply chain. NAFTA more than anything else freed up the movement of parts. Brake systems from Toluca, Mexico, and transmissions from Guelph, Ont., might come together in San Antonio to be riveted onto a Toyota Tacoma, or an Accord rolling out of the Honda plant in Marysville, Ohio.
Each part on a North American vehicle — be it in Canada, Mexico, or the U. S. — may have crossed borders up to eight times, according to the Center for Automotive Research. Of course, names of suppliers such as Robert Bosch and Linamar Corp. don’t have as much heft in a Twitter tirade as Ford or GM, but if Trump is spending long nights in Mar- aLago poring through Federal Trade Commission spreadsheets, he won’t like what he sees. The U. S. trade balance with Mexico for auto parts is about one- third larger than that for vehicles themselves.
All told, if the U. S. were to abolish NAFTA, it would eventually welcome some 22,000 new production jobs, according to the Center for Automotive Research. The bad news, though, is that the country would also lose 37,000 jobs, as vehicle prices creep up and choices and demand tick down.
“That’s a very conservative estimate,” said Kristin Dziczek at the Center for Automotive Research. “I don’t know many people who can afford a 100- per- cent Made-in-the-USA vehicle.”