President Donald Trump told the chief executives of the three biggest automakers in the U.S. that he’ll cut taxes and reduce environmental regulations to restore the nation’s manufacturing sector.
“We’re bringing manufacturing back to the U.S. bigly, we’re reducing taxes, very substantially, and we’re reducing unnecessary regulations,” Trump told reporters Tuesday, seated between the CEOs of General Motors and Fiat Chrysler Automobiles and across a table from the head of Ford.
The remarks reflect the sweeteners Trump will try to use to get U.S. automakers building new factories at home. The last vehicle assembly plant GM, Ford or Fiat Chrysler opened on their home turf was 2006, around the time the companies began to shuttering facilities across the country. Those restructurings fell short of keeping GM and Fiat Chrysler’s predecessors out of government-backed bankruptcies.
“I am, to a large extent, an environmentalist,” Trump told GM’s Mary Barra, Ford’s Mark Fields and Fiat Chrysler’s Sergio Marchionne. “I believe in it. But, it’s out of control.”
Trump’s pledge to ease off on environmental rules and taxes would blunt any impact of his plans to renegotiate U.S. trade policy with its neighbors. After spending roughly a year and a half attacking Ford in particular for building cars in Mexico, the president has stood firm with opposition to auto imports.
Fiat Chrysler, whose truck-heavy line-up had left it vulnerable to concerns about meeting future clean-air standards, led automotive stocks higher. Its U.S. shares rose 6.4 percent a 12:30 p.m. in New York, while GM and Ford each gained less than 2 percent.
The White House summit was just the latest in a series of meetings this week where Trump has called for bolstering the U.S. manufacturing sector. His reiterated desire to reduce regulations may indicate a willingness to scale back federal fuel-economy standards.
“We had a very constructive and wide-ranging discussion about how we can work together on policies that support a strong and competitive economy and auto industry, one that supports the environment and safety,” GM’s Barra said in a statement.
Trump’s meeting occurred a day after he signed a memorandum withdrawing the U.S. from the Trans-Pacific Partnership trade agreement, claiming the pact would hurt workers. He has pledged to renegotiate the North American Free Trade Agreement with Mexico and Canada.
“We’ve repeatedly said that the mother of all trade barriers is currency manipulation, and TPP failed in meaningfully dealing with that,” Ford’s Fields, who also met with Trump on Monday, told reporters following the meeting. “We appreciate the president’s courage to walk away from a bad trade deal.”
The last new vehicle assembly plant GM, Ford or Fiat Chrysler built in the U.S. was GM’s Lansing Delta Township, opened about 11 years ago. The factory makes Chevrolet Traverse, GMC Acadia and Buick Enclave SUVs.
“I appreciate the president’s focus on making the U.S. a great place to do business,” Fiat Chrysler’s Marchionne said in a statement. “We look forward to working with President Trump and members of Congress to strengthen American manufacturing.”
Trump’s meeting on Monday with prominent American manufacturers included Elon Musk, the head of Tesla Motors and Space Exploration Technologies. Trump said then he’d dramatically cut regulations and corporate taxes, while warning manufacturers will face stiff penalties if they move production outside the country.
All three of the top U.S. automakers have given Trump fodder for promoting his efforts to boost U.S. hiring. Ford canceled a $1.6 billion car assembly plant in Mexico and has said it will spend $700 million to expand a Michigan factory instead.
GM and Fiat Chrysler have each pledged $1 billion in investment toward domestic assembly, though both companies have said their plans were made prior to Trump winning the election.
All three also continue to produce vehicles in Mexico. Ford will assemble Focus compacts at an existing factory in Hermosillo already building Fusion and Lincoln MKZ sedans.
GM hasn’t announced any step back from plans announced in late 2014 that it would spend $5 billion on new plants in the country by 2018, creating 5,600 jobs. Fiat Chrysler has seven facilities south of the border building parts as well as Ram trucks and vans, Fiat 500 small cars and Dodge Journey sport utility vehicles.
In November, the Alliance of Automobile Manufacturers sent an eight-page letter to the Trump transition team with a series of recommendations, including aligning the Environmental Protection Agency and the National Highway Traffic Safety Administration. Inconsistent rules threaten the industry with “potentially billions of dollars in fines,” said the trade group, which represents most of the world’s biggest automakers including GM, Ford, Toyota Motor Corp. and Volkswagen AG.
The alliance asked for a presidential panel to review all auto regulations, including fuel-economy rules, citing consumer rejection of efficient cars and electrified vehicles and embrace of pickups and SUVs.
(c) 2017, Bloomberg · Jennifer Jacobs, Jamie Butters