Detroit car show braces for Trump

Detroit car show braces for Trump NAMPA/AFP

The global car industry was bracing for more confrontational tweets from President-elect Donald Trump yesterday, with the festive Detroit car show due to kick off.

As he prepares to take office later this month, Trump has used his Twitter account to take aim at car makers, warning that they may face stiff import tariffs for selling cars made with foreign labour on the US market.

As recently as Thursday, Trump trained his sights on Toyota for building cars in Mexico, after having similarly spotlighted Ford and General Motors.

In what appeared to be a pre-emptive manoeuvre, Fiat Chrysler announced late Sunday that it was returning manufacture of the Ram heavy-duty truck to the United States from Mexico, while investing $1 billion in Michigan and Ohio factories and creating 2 000 jobs.

After having taken on several car makers in succession, the annual celebration of the global car industry in a state which narrowly voted for Trump in November seems like a very inviting target for the president-elect.

Scott Houldieson, a regional executive with the United Automobile Workers in Chicago, told AFP that Mexican car workers earned between $5 and $8 an hour, versus an average of $20 for newly hired Ford workers in the United States.

At corporate headquarters and in the halls of Detroit hotels where executives have gathered, a pressing question has been whom the president-elect would target next. Have Ford, Toyota and GM weathered the storm?

A representative for one car maker who declined to be named told AFP that keeping close watch on Trump's Twitter account, his favoured means of public address, had become a priority for the company's social media team.

Other manufacturers said they followed a broad spectrum of media.

"We monitor the entire media landscape, including social media, for all news," Volkswagen spokeswoman Jeannine Ginnivan told AFP.

AFP got a similar reply from a representative for Audi, a Volkswagen AG brand which began producing the new Q5 model in Puebla, Mexico in September. Volkswagen-branded cars are also produced in the country.

The Audi plant, the first for the brand in North America, has a production capacity of 150 000 cars a year and employs as many as 4 200 people.

Fiat Chrysler, which took a US taxpayer bailout in 2009 following the global financial crisis, emphasises its presence in the United States.

"Since June 2009, we have announced $8.4 billion in US-based investments and have added almost 25 000 new US jobs," said Jodi Tinson, a spokeswoman.

Trump has harshly criticised the trade policies of previous US presidents, claiming they resulted in millions of job losses in the United States. He has also threatened to withdraw from or renegotiate the North American Free Trade Agreement, which involves Canada, the United States and Mexico.

Under the treaty, if at least 65 percent of a car's parts have a North American origin, it can be sold duty free in the region.

Car manufacturers in the United States have seized on this provision to invest in Mexico. Between 1999 and 2013, foreign investments in that country have exceeded $30 billion, according to the Mexican trade promotion body ProMexico.

The United States in the first quarter of 2015 also became the largest importer of Mexican-made cars, according to the Mexican automotive association AMIA.

The largest US car makers have production facilities in Mexico, including companies like Mercedes-Benz and BMW, which will begin producing cars there in 2018 and 2019 respectively.