Many Auto Industry Leaders Fear Potential Trade Conflicts Under Trump
KELLY MCEVERS, HOST:
The auto industry found a friend, a scold and a tough disciplinarian in President Obama, but they don't know what they'll find in a President Trump. Reporting from the Los Angeles Auto Show, NPR's Sonari Glinton takes the temperature of the car business.
SONARI GLINTON, BYLINE: Last night, President-elect Donald Trump tweeted (reading) just got a call from my friend Bill Ford, chairman of Ford, who advised me that he will be keeping the Lincoln plant in Kentucky - no Mexico.
But Ford had never intended to close that plant. It was going to shift production of one SUV from Kentucky. Now that won't happen. It will make those Lincoln SUVs in Kentucky but will produce fewer of a different model. Those kinds of messages make car executives nervous, though you won't hear it when you talk to them here at the LA Auto Show.
REID BIGLAND: Well, there's been a lot of chatter lately, obviously, with the president-elect. Donald Trump coming in, lots of discussions about the TPP, NAFTA. But I think from my perspective, we need to focus in on the things that we can control.
GLINTON: Reid Bigland is with the FCA group, formerly Chrysler. He runs the company's Maserati division. On the campaign trail, President-elect Trump said on various occasions that America's trade deals, such as NAFTA, should be either renegotiated or scrapped. The industry sees these deals as vital, though Bigland says this isn't the first time a global car company has had to deal with a surprise change in administrations.
BIGLAND: We sell these products in over 120 countries around the world. We deal with all kinds of different tariffs and nontariff barriers and trade agreements and changes to regulation - that happens all the time. You know, from our perspective and certainly from my perspective, governments make rules and businesses react. So just tell me what the rules are of the game, and we're going to figure out a way to be successful in that environment.
PAUL EISENSTEIN: The auto industry is scared and very seriously scared about the possibility of seeing trade wars and barriers that we saw before the Great Depression.
GLINTON: Paul Eisenstein is publisher of the auto industry website the Detroit Bureau. He's been following the car business for decades. Now, the Obama administration put tough fuel economy rules aiming at getting the industry to an average of 54.5 miles per gallon. Eisenstein says carmakers might have a friendlier ear when those fuel standards come up for review. But...
EISENSTEIN: If it comes down to a trade-off between getting rid of the mileage standard and having trade barriers elected, I think that they would rather see the fuel economy standard stay in place, along with the relatively free trade that we have right now.
GLINTON: Regardless of what a Trump administration would do with fuel rules, most industry people say electric cars are here to stay. Stephanie Brinley is with IHS Automotive.
STEPHANIE BRINLEY: Regardless of what happens with the administration over the next six or eight months, it's not a five-year play. If you look at investment in the electrification of vehicles, it's a 10, 15, 20, 30-year play.
GLINTON: Now more immediately, a president has a lot of leeway trade wise. Right now, the industry is in incredible health - record sales and profits - which is why industry insiders fear any tensions with Mexico, which has become a crucial link in the global automotive supply chain.
REBECCA LINDLAND: I think that what they're hoping is that that's campaign rhetoric.
GLINTON: Rebecca Lindland is with Kelley Blue Book, meaning Trump's threats to force carmakers to move production back to the U.S. But the possibility of new tariffs or trade sanctions - that's what really worries the industry.
LINDLAND: Well, that's the big challenge I see for them is if that gains momentum, if tariffs gain momentum, that can be really damaging. That's disruption. That's disruption.
GLINTON: One car executive here at the LA Auto Show joked his company had dealt with all kinds of governments. The question for the industry is what kind this one will be. Sonari Glinton, NPR News, Los Angeles.
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