Fiat Chrysler CEO: Automakers need clarity from Trump
“I need clarity, and we need rules.”
That’s what Fiat Chrysler CEO Sergio Marchionne had to say Monday morning at the Detroit Auto Show when asked about the automaker’s business plans under President-elect Donald Trump.
Marchionne said long-term planning for its Mexican operations are on hold while the auto industry waits to see whether Trump can follow through on his threat to impose a 35% tariff on auto imports from Mexico.
He said that the current uncertainty would make it “incredibly imprudent” for Chrysler to invest any more in Mexico at this time. He also added that steep tariffs could mean that Fiat Chrysler pulls back from Mexico entirely.
“It’s possible if tariffs are imposed, if they’re sufficiently large, we’d have to withdraw. It is quite possible,” he said. “Right now they [rules] are all on the table. We’ll wait.”
Last week Ford announced it was scrapping plans for a $1.6 billion plant in Mexico and instead investing $700 million in a Michigan plant, a move that will create 700 jobs there.
On Sunday, Fiat Chrysler announced its own $1 billion investment in two plants in Michigan and Ohio, creating 2,000 jobs.
Trump tweeted about the move, saying “It’s finally happening.” But Marchionne said Monday that the strategy had nothing to do with Trump or his trade policies.
Indeed, Fiat’s investment plans were part of a labor deal Fiat Chrysler reached with the United Auto Workers union in 2015. It calls for the company to invest a total of $5.3 billion in U.S. plants.
“I wish I could give him [Trump] credit for this,” the CEO told reporters Monday afternoon. “But the thinking was in place beforehand.”
And he said he isn’t concerned about Trump’s Twitter attacks Fiat Chrysler. “This is new territory for most of us. None of us have had a tweeting president before,” he said.
The CEO added at a press conference later Monday that he’ll never get into a Twitter war with the president-elect.
“If I ever start tweeting, shoot me,” Marchionne told reporters. He doesn’t even have a Twitter account.
Marchionne stressed that the decision made economic sense for the company.
“We’re not going to do anything about President-elect Trump,” he said. “We’ll just respond to relevant policies.”
The CEO said he’d like to talk about trade policy with Trump directly. Specifically, he would urge that any tariff imposed on Mexican imports would grandfather in plants that are already in place. Marchionne said that would discourage new investment in Mexico without punishing U.S. companies for previous investments there.
He said he doesn’t even know whether Fiat Chrysler’s Canadian plants would be subject to the same tariffs as those in Mexico, though he hopes that won’t be the case.
“To the best of my knowledge there have been no tweets on Canadian production of cars,” Marchionne quipped.
And he cautioned that if new U.S. policies lead to a global trade war, it will be bad for all U.S. workers, including those at auto plants.
Tariffs on imports from Mexico and Canada also would be “lethal” for Fiat Chrysler’s plants in those countries, since they depend on selling into the U.S. market. But they wouldn’t close immediately.
“You can’t do it overnight. For us it would be impossible,” he said. “You can’t just pick up all your toys and go home.”
Fiat Chrysler has seven Mexican plants that employ about 11,500 workers. The plants primarily serve the U.S. market, but also build vehicles for Europe, South America and Australia. They build the Fiat 500, Dodge Journey, the Ram ProMaster van and the Ram 1500-3500 pickups. The new Jeep Compass will also be built in Mexico.