President Donald Trump greets Ford Motor Company CEO Mark Fields as he hosts a meeting with U.S. auto industry CEOs at the White House in Washington January 24, 2017. REUTERS/Kevin Lamarque

Stick to the Plan

Trump’s goal is to force production back to the U.S. Nissan CEO Carlos Ghosn has, in recent weeks, said that he’ll consider such options. GM announced it would bring back some axle production from Mexico, adding 400 jobs. But Chairman and CEO Mary Barra also stressed, during a media briefing at this month’s Detroit Auto Show, that GM won’t make major changes in its global production strategy to stay on the president’s good side.


Big Three Hear Trump’s Plea for More Jobs

In the week’s before the inauguration, Trump had criticized GM for importing its Cruze model from Mexico. That was partially inaccurate. The vast majority of those Chevrolet models are made in Ohio, with only a few thousands Cruze hatchbacks coming from Mexico.

And analysts say the economics of moving that five-door model to the States would be unjustified. New border barriers could “reduce choice” by forcing manufacturers to abandon many low volume models, said analyst Dave Sullivan, of AutoPacific, Inc.

Ford’s Fields, despite trying to find some common ground with the new president this week, has been most blunt about staying the course with the maker’s manufacturing strategy. Though Ford will not build a second, $1.6 billion assembly plant in Mexico, it will go ahead with plans to move the small Focus model to that country, instead consolidating production at an existing, underutilized facility in Hermosillo.

And, on Thursday, Fields told analysts and reporters during an earnings conference call that he’s not about to change strategy, especially with the U.S. auto market starting to slow after three years of record growth.

“Nothing is on the plate right now for brand new facilities” in the U.S., Fields said.

Not an Easy Withdrawal

Other automakers, including Toyota, BMW and Volkswagen have said they don’t intend to shift production, though the Japanese maker hopes to increase U.S. output by growing sales and market share. BMW, meanwhile, has pointed out that it is actually a net exporter from its Spartanburg, South Carolina assembly plant.

Volkswagen is perhaps most vulnerable to any new trade restrictions, producing about 32 percent of the vehicles it sells in the U.S. south of the border. It is increasing State-side production, but by adding a new SUV model, the Atlas, at its Chattanooga plant, not by transferring Mexican operations.


Fiat Chrysler Earnings Hit $2B for 2016

For his part, FCA CEO Sergio Marchionne said the automaker could move some heavy-duty pickup production back from Mexico “relatively quickly.” That appears to be because the smallest of the domestic makers is already retooling a former passenger car plant in Sterling Heights, Michigan, to build more of its popular Ram pickups.

But analyst David Cole cautioned that on the whole, any shift in production from Mexico “wouldn’t be quick.” Adjusting manufacturing plans “can take years,” explained Cole, the director-emeritus of the Center for Automotive Research in Ann Arbor, Michigan. The conversion of the FCA plant near Detroit, for example, was already in the planning stages at least two years ago.

Is There a U.S. Automaker Mega-Merger on the Horizon?

Trump’s trade policies could lead to an even more dramatic twist in the auto industry, suggested FCA CEO Marchionne. Two years ago, he proposed a merger with cross-town rival GM, but “we were rejected,” the Canadian-educated executive told reporters during his own earnings conference call Thursday.

But that appears to be an idea Marchionne wants to revive, telling those on the call, “A tie-up of that caliber would create the largest American car company in the U.S., and create the largest car company in the world, and it would be American-based.”

He hasn’t discussed the idea with either Trump or GM, he indicated, but it would be the sort of tie-up that could fit an “America First” agenda.