Fiat Chrysler Automobiles NV said it might have to shut its Mexican auto plants if President-elect Donald Trump carries out his campaign vow to slap tariffs on car imported into America.
Fiat Chrysler would have to close its Mexican car plants if Donald Trump follows through on campaign promises to impose stringent tariffs on vehicles coming into the US, chief executive Sergio Marchionne said on Monday.
“It’s possible that if economic tariffs are imposed . . . and are sufficiently large, it will make production of anything in Mexico uneconomical and we would have to withdraw,” Chief Executive Officer Sergio Marchionne told the Financial Times at the annual Detroit auto show. “It’s quite possible.”
Marchionne said Fiat Chrysler won’t decide its fate in Mexico until Trump and the Republican-led Congress take any action.
“We want clarity, we all want clarity,” he said.
Meanwhile, Fiat's $1 billion plan to build in the U.S. three new Jeeps and a Ram pickup now produced in Mexico won plaudits from Trump as he pressures the auto industry to hire and manufacture above the border, Bloomberg reported.
The automaker will add 2,000 jobs at factories in Michigan and Ohio, the Italian-American company said Sunday ahead of the Detroit auto show. It will retool the facilities by 2020 and add the Wagoneer and Grand Wagoneer sport utility vehicles and a pickup model to its lineup. After improvements to a plant in Warren, Michigan, the site will be able to assemble Ram HD trucks now produced in Saltillo, Mexico.
“It’s finally happening,” Trump wrote in a tweet Monday morning, noting the announcement is coming on the heels of Ford Motor Co.’s decision last week to cancel a $1.6 billion factory in Mexico and invest $700 million into a Michigan plant. “Thank you Ford & Fiat C!”
Fiat Chrysler circulated the plans before any potential criticism of the company by Trump, who last week threatened General Motors Co. with tariffs for importing a version of its Chevrolet Cruze from Mexico.
“We don’t make investment decisions based on risk of a tweet,” Marchionne told reporters during a roundtabe at the North American International Auto Show. “I thank him,” he said of Trump. “We owed the country this investment.”
Fiat Chrysler employs more than 11,800 workers in Mexico at seven manufacturing facilities, which shipped 477,000 vehicles in 2015, according to the company’s website. Its models built south of the border include Ram trucks and vans in Saltillo and Fiat 500 small cars and Dodge Journey SUVs in Toluca.
Having the ability to make those big work trucks in the U.S. as well as Mexico provides a hedge against a potential tax on imported vehicles, which Trump has threatened against GM and Toyota Motor Corp., in addition to Ford.
“Politically, it follows along with everything that’s going on, in terms of domestic production,” said Tom Libby, an analyst with IHS Markit.
(Newsmax wire services contributed to this report).
© 2024 Newsmax Finance. All rights reserved.