Ford Motor Co., a target of criticism from
President-Elect Donald Trump over its intentions to invest in Mexico, says it
is cancelling its plans to build a factory there and will invest $700 million
at a Michigan factory.
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Trump Slams GM Over Mexican-made Chevy Cruze
By Matthew
Rocco
2017 Chevrolet Cruze hatchback (General Motors)
President-elect Donald Trump threatened to tax any
vehicles shipped from Mexico to the U.S. by General Motors (GM), continuing his
criticism of car production south of the border.
Trump, who has heavily criticized Ford (F) for
constructing a new factory in Mexico, on Tuesday slammed GM for making
Chevrolet Cruze compact cars in the country.
“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!” Trump wrote on Twitter (TWTR).
GM, the largest U.S. automaker, responded later Tuesday
by saying that all of its Cruze sedans sold in the U.S. are built in an
assembly plant in Lordstown, Ohio. The company builds the new Cruze hatchback
for global markets in Mexico, and a “small number” of those hatchbacks are sold
in America, GM said in a statement. The hatchback version of the Cruze went on
sale in the fall.
Glenn Johnson, president of a United Auto Workers union
local at GM’s Lordstown factory, dismissed the criticism, telling the
Associated Press that the Ohio plant isn’t equipped to build the hatchback
Cruze. He said hatchback production amounts to less than a day’s worth of
output for the Ohio plant.
“It makes for news, that’s all,” Johnson said of Trump’s
tweet, according to the AP.
In 2016, GM sold 171,552 units of the Chevrolet Cruze
through November. GM does not break down sales of the sedan versus the
hatchback.
Cruze sales were down 18% year-over-year with one month
of sales to go. Still, the entry-level vehicle was the fourth-best selling
model for Chevrolet during that period behind the Silverado truck, Malibu
midsize sedan and Equinox crossover.
This isn’t the first time an automaker has come under
fire from Trump.
Ford is building a $1.6 billion factory in Mexico, where
the company plans to move production of small cars beginning in 2018. CEO Mark
Fields has defended Ford’s plans by arguing that new models in the U.S. will
replace car production heading to Mexico, so no American jobs would be lost.
Ford is said to be planning a comeback for the Ranger and
Bronco. The vehicles would be built at Ford’s Wayne, Mich., plant, replacing
the C-Max and Focus once they move to Mexico.
Trump also made headlines following a conversation with
Ford Chairman Bill Ford, who promised Trump that Lincoln MKC production would
remain in Louisville, Ky. The MKC was originally destined for Mexico.
Mexico has become a hotbed of automotive production over
the last two decades, attracting GM, Ford and import brands including Honda
(HMC). Companies have sought Mexico’s lower labor costs in the production of
small cars, which are less profitable than hot-selling trucks and sport-utility
vehicles.
Automakers have been under additional pressure from weak
demand for cars like the Cruze. Sales of SUVs and pickup trucks far outpaced
passenger cars in 2016, forcing GM, Ford and others to cut production of small
cars. GM announced in November that it would cut a third shift and lay off
1,250 workers at the Ohio plant because of sagging demand for cars. Fiat Chrysler
Automobiles (FCAU) even pulled its Chrysler 200 off assembly lines.
The industry sold 8.4% fewer passenger cars in the U.S.
through November of last year, according to Autodata. Sales of light trucks,
including SUVs, crossovers and vans, were up 7%.
Automakers are due to report December and full-year 2016
sales on Wednesday.
