Ford CEO warns of huge im­pact from Trump’s pro­posed tar­iff

Malta Independent - - BUSINESS -

We look for­ward to work­ing with the new ad­min­is­tra­tion and the en­tire newly elected Congress

The tus­sle be­tween Pres­i­den­t­elect Don­ald Trump and Ford Mo­tor Co. is alive and kick­ing.

Dur­ing the cam­paign, Trump blasted Ford for plan­ning to move its North Amer­i­can small­car pro­duc­tion to Mex­ico, where wages are 80 per­cent lower than in the U.S.

Ford re­turned fire, crit­i­ciz­ing Trump for fail­ing to men­tion the 25,000 U.S. jobs it’s added since 2011.

Now Mark Fields, Ford’s chief ex­ec­u­tive of­fi­cer, is tak­ing aim at Trump’s plan to scut­tle free trade and im­pose a 35 per­cent tar­iff on cars made south of the bor­der.

“A tar­iff like that would be im­posed on the en­tire auto sec­tor and that could have a huge im­pact on the U.S. econ­omy,” Fields told re­porters af­ter a speech at the Au­toMo­bil­ity con­fer­ence in Los An­ge­les. Ford fa­vors “free and fair trade.”

Fields said that the com­pany has been in touch with Trump’s tran­si­tion team and that he sent a con­grat­u­la­tory let­ter to the pres­i­dent-elect. The com­pany de­clined to re­lease the let­ter.

“I con­tinue to be con­vinced that the right poli­cies will pre­vail, be­cause I think we all share the same ob­jec­tive, which is a healthy and vi­brant U.S. econ­omy,” Fields said. “We ex­pect to work very ef­fec­tively and pos­i­tively with the pres­i­dent-elect’s ad­min­is­tra­tion as well as the new Congress.”

En­gage Pos­i­tively

Fields said he’s un­sure if Trump will carry through on his threats to ter­mi­nate trade deals like the North Amer­i­can Free Trade Agree­ment, which lets goods flow be­tween Mex­ico, the U.S. and Canada with­out tar­iffs.

“We’ll have to see when Pres­i­dent-elect Trump gets into of­fice and the pol­icy he ad­vo­cates,” Fields said in an in­ter­view on Bloomberg TV. “We’ll en­gage pos­i­tively with the ad­min­is­tra­tion, talk about poli­cies that will help pro­vide growth here in the U.S. and do our part. But at the same time, make sure that as a global, suc­cess­ful, multi-na­tional com­pany that we’re build­ing where we’re sell­ing.”

If Trump in­sti­tutes a 35 per­cent tar­iff of Mex­i­can-made ve­hi­cles “im­me­di­ately, it will wreak ab­so­lute havoc,” Re­becca Lind­land, se­nior an­a­lyst for Kel­ley Blue Book, said in an in­ter­view. “If they have time to plan and rear­range pro­duc­tion, it will cause slightly less havoc. But ei­ther way, it’s go­ing to be very costly for both con­sumers and busi­nesses.”

Jobs Dis­pute

Dur­ing the pres­i­den­tial cam­paign, Ford pushed back on Trump’s as­ser­tions that the com­pany was mov­ing jobs to Mex­ico. The Wayne, Michi­gan, fac­tory los­ing the Fo­cus small car and CMax hy­brid will get new pro­duc­tion of a Ranger pickup and re­vived Bronco sport util­ity ve­hi­cle, peo­ple fa­mil­iar with the plans have said. Ford has said no jobs will be lost at the Michi­gan plant.

Ford Ex­ec­u­tive Chair­man Bill Ford, great-grand­son of the com­pany’s founder, even met with Trump, but the can­di­date’s crit­i­cism of the au­tomaker con­tin­ued.

“We are ev­ery­thing that he should be cel­e­brat­ing about this coun­try,” Bill Ford said in Septem­ber.

Fields said Tues­day at the con­fer­ence, which is the kick­off to the Los An­ge­les Auto Show, that com­pany of­fi­cials have talked to Trump’s tran­si­tion team and ex­pect to be able to work with him as pres­i­dent.

“We look for­ward to work­ing with the new ad­min­is­tra­tion and the en­tire newly elected Congress,” Fields said. “We’re in con­stant com­mu­ni­ca­tion.”

Fields would like Trump to take an­other look at Obama ad­min­is­tra­tion fuel econ­omy reg­u­la­tions orig­i­nally de­signed to dou­ble av­er­age new-ve­hi­cle fuel-econ­omy to 54.5 miles per gal­lon by 2025. Achiev­ing that goal has be­come more dif­fi­cult as gaso­line prices have dropped and con­sumers have pur­chased more SUVs and trucks, while turn­ing away from ef­fi­cient cars and gas-elec­tric hy­brid ve­hi­cles.

“We want to make sure that fuel econ­omy reg­u­la­tions are aligned with mar­ket re­al­i­ties,” Fields said. Ford wants to make sure rules re­quir­ing elec­tric and hy­brid ve­hi­cles match up with “how con­sumers are re­act­ing to some of the new tech­nolo­gies.”

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