no avatar

Auto CEOs should relax about trade

• Jan 24, 2017 at 12:00 AM

Three things have emerged clearly from the press preview at the 2017 North American International Auto Show and its AutoMobili-D adjunct.

One: Every carmaker and major supplier is going to bring us self-driving automobiles as quickly as they possibly can, whether we want them or not.

Two: Electrified vehicles will take over the world sooner or later.

And three: Donald Trump has really gotten inside the heads of automotive CEOs. Many, including General Motors chief Mary Barra and Sergio Marchionne, head of Fiat Chrysler, openly worried that the new president doesn't appreciate the difficulty of running a global automaker nor the complexities of international trade.

Now, we are philosophically, intellectually and even reflexively free-trade: It's what makes the world go 'round economically. And Trump's demagoguing on the issue of automotive jobs in Mexico has bothered us since he launched his presidential campaign.

It's also true that the kind of trade-modification measures Trump has suggested — such as a 35 percent tariff on car imports to the U.S. from Mexico — could pretty much explode the auto industry as it's now constructed.

But our advice is that car-company CEOs should relax, and they should take a broader view. They might enjoy America's pre-eminent auto show more if they did.

Here's why: Donald Trump is a negotiator if he's anything, and clearly he's staking out a negotiating position so that he can get what he really wants from Mexico, which likely is some substantial improvements in NAFTA. He is a highly successful global businessman who surely knows what he's doing more than the cognoscenti will acknowledge.

Trump himself very recently gave us an example of how he's likely to handle Mexican auto production. Remember the campaign when he said Mexico will build a wall against illegal immigration to the United States and pay for it? Well, a few days ago, Trump modified that to say what he's more likely to do is build a wall and then make sure Mexico reimburses the U.S. for it. Also, it might not be a wall after all but just a really high fence.

Also, Trump already has been pretty good for the car business as a whole and likely is to be even better once he actually takes office.

Nissan CEO Carlos Ghosn implied the other day that Trump was responsible for the jump in American consumer confidence which rather suddenly has led auto chieftains like him to hope that 2017 actually could be better for U.S. sales than the record level in 2016.

Also consider the fact that Trump wants to cut corporate taxes, Ghosn said, and "all of this is going to go in the direction of boosting growth" and creating "great things for the industry."

Similarly, Toyota board member Mark Hogan told Forbes that he's optimistic. "I look forward to a more pro-business environment, including tax cuts and incentives for job creation," Hogan said. Trump is "willing to work on rebuilding the U.S. manufacturing base so that we can become a pre-eminent exporter again."

All of that doesn't even take into account the strong possibility that Trump will relax stiff future emissions and fuel-economy standards.

Looking at this bigger picture might help automotive CEOs look forward to the next four years just a bit more.


Recommended for You

    Grand Haven Tribune Videos