Trump threatens General Motors on Twitter for importing cars from Mexico
GM makes the vast majority of compact Chevrolet Cruzes at a sprawling complex in Lordstown, Ohio, east of Cleveland.world Updated: Jan 03, 2017 21:42 IST
In another tweet targeting a US company, President-elect Donald Trump is threatening to slap a tax on General Motors for importing compact cars to the US from Mexico.
But GM makes the vast majority of compact Chevrolet Cruzes at a sprawling complex in Lordstown, Ohio, east of Cleveland.
Trump tweeted early Tuesday that GM is sending Mexican-made Cruzes to the U.S. tax-free. He told GM to make the cars in the US “or pay big border tax!”
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!— Donald J. Trump (@realDonaldTrump) January 3, 2017
GM imports only hatchback versions of the Cruze from a factory in Ramos Arizpe, Mexico, and it sold only about 4,500 of them in the US last year, spokesman Patrick Morrissey said. The company sold about 172,000 Cruzes through November. The hatchback, which went on sale in the US in the fall, is built in Mexico for global distribution, Morrissey said.
GM shares fell by about 1 percent in premarket trading immediately after the tweet, but bounced into positive territory after the market opened Tuesday.
Cruze hatchback production amounts to less than a day of output at the Lordstown plant, said Glenn Johnson, president of a United Auto Workers union local at the factory. The union, he said, is not protesting the move to build the hatch in Mexico.
“It makes for news, that’s all,” Johnson said of Trump’s tweet. The Lordstown factory, he said, is not equipped to build the hatch.
GM did import some Cruze sedans from Mexico last year to meet demand as it was rolling out a new version of the compact car, Morrissey said, but that has stopped and all sedans sold in the US are now made in Ohio, he said.
The tweet was the latest threat from Trump to tax companies that move production to Mexico and ship products back to the US under the North American Free Trade Agreement. Last year Trump went after Ford for plans to shift production of the compact Focus to Mexico. Jobs at the Detroit-area factory that now makes Focuses would be preserved because the plant is to get a new small pickup truck and SUV. Ford’s CEO says the company will not change the plans.
Trump’s targets have ranged from US retailers and defense contractors, to tech companies. Amazon.com, Boeing and Macy’s have been the subject of Trump tweets in the past.
Last year Trump touted a deal to keep 800 jobs at the Carrier furnace factory in Indianapolis from going to Mexico. He has promised to lower corporate tax rates to preserve factory jobs inside the United States, while threatening harsh penalties for companies that produce goods overseas to save on labor costs. On Twitter, Trump warned that he will impose a 35 percent tariff on the goods imported by companies that outsource production.
In November, GM said it would lay off about 1,250 workers at the Lordstown plant due to sagging demand for cars as US buyers take advantage of low gasoline prices to buy trucks and SUVs. The workers on the third shift at Lordstown will go in indefinite layoff starting Jan. 23, although some may move to other GM factories.
Sales of the Cruze were down more than 18 percent through November.
Shifting demand from cars to trucks and SUVS is forcing General Motors to lay off more than 2,000 workers. Last month, 61.5 percent of US new vehicle sales were trucks and SUVs, according to Autodata Corp., and analysts say there’s no sign that will change anytime soon.