After persuading Ford to scrap a $1.6 billion plan to build a plant in Mexico, president-elect Donald Trump slammed General Motors for allegedly using Mexican workforce to build its entire Cruze sedan line. Experts noted the president-elect didn’t got his facts straight before slamming the Detroit-based car maker on Twitter.
The real estate tycoon wrongfully criticized GM for producing its Chevrolet Cruze in Mexico. In reality, the company built only the Cruze hatchback abroad, which accounts for just 4,400 sold units per year. Automotive industry experts noted GM’s Cruze sedan is still being built in the U.S., in a plant in Lordstown, Ohio.
Ford, on the other hand, plans to relocate jobs related to its Focus subcompact to Mexico. The company won’t build another plant there but it will boost production at an existing facility. The relocation will cost Michigan some jobs. In return, the car maker pledged to invest $700 million in the state and create 700 extra jobs. Trump gave his seal of approval on Twitter.
Experts Expect Trump to Eye Other U.S. Car Makers
Trump’s flop regarding GM’s relocation plans went unnoticed due to the extensive press coverage of the Ford deal. Experts, however, think Trump’s mistake is excusable. They explained the automotive industry is a complex industry with tons of car models and parts.
What’s more, GM’s hatchbacks haven’t gained very much traction in the U.S. even though Europeans adore them. This is partially why the car maker decided to build the models in a Mexican plant where it can dodge the U.S.’ 10% tariffs.
Analysts expect the president-elect to eye other car makers in his crusade to prevent U.S. jobs from fleeing the country. He eyed Ford on the campaign trail because he heard it was about to build a plant in Mexico. In the meantime, the NYC billionaire reportedly persuaded the company to keep MKC crossover production in the U.S.A. Ford later commented on the news, saying that it had no plans to ship jobs to Mexico but to make minor adjustments.
It is worth noting that virtually every car maker selling its products to the U.S. has at least a plant in Mexico. And Volkswagen, Honda, and Toyota are no exception. Trump, however, has taken aim only at American car makers.
GM Has the Most ‘American’ Cars of the Lot
Experts noted that even though GM produces some of its models in Mexico, it has the most “American” cars in the book. According to a report from the American University’s Kogod School of Business, 90 percent of all ‘most American’ vehicles are GM cars. The only non-GM model on the list is the Ford F-150 pickup. So, industry experts think Trump should have picked on other car makers instead.
Volkswagen, for instance, produces most of its car models designated to the US market in Mexico. Other models from various car makers with a made-in-Mexico tag are the Nissan Sentras, Honda Fits, and some of the Mazda 3s.
Toyota recently announced it is investing in a new Mexico plant to manufacture its Corolla. Auto making specialists explained companies would rather build small models in countries with cheap labor force because profit margins would be very thin in countries like the U.S.
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