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How Donald Trump’s tweets set the tone for the biggest auto show of the year

The Detroit auto show kicked off with jubilation over the sector's record sales. But there's concern over Donald Trump's attacks on the industry. (Video: Reuters)

DETROIT — The auto industry’s biggest players have gathered at the North American International Auto Show, as they do every January, to showcase their latest electric vehicles, SUVs and pickup trucks. This year, however, the cars varnish over a deepening unease about the industry’s standing with President-elect Donald Trump.

The president-elect has taken to Twitter four times in the new year to laud some automakers and admonish others. The latest to get his attention is Fiat Chrysler, which unveiled plans to grow two U.S. auto plants, creating 2,000 new jobs in the Midwest.

“It’s finally happening,” Trump tweeted. “Fiat Chrysler just announced plans to invest $1BILLION in Michigan and Ohio plants, adding 2000 jobs.”

The Italian-American auto giant, who timed its announcement for the annual auto show, insisted its move was part of a year-old business strategy and not a response to presidential goading. It will continue to make hundreds of thousands of cars south of the border and sell them on American soil.

New policies under the Trump administration, however, such as a proposed 35 percent tax on goods from Mexico, could warp the company’s future.

“It’s possible that if the economic tariffs that are imposed by the U.S. administration on anything that comes into the United States, if they are sufficiently large, it will make the production of anything in Mexico uneconomical,” Fiat Chrysler chief executive Sergio Marchionne said Monday in Detroit, “and therefore we will have to move on.”

Asked about future investments in Mexico, Marchionne, poked at the uncertainty under Trump, saying he won’t change course in the country without a stronger understanding of the future trade climate.

“I need clarity,” he told reporters in Detroit. “I need rules. And right now, they’re all on the table.”

Trump’s attacks have forced some automakers to defend their contributions to the U.S. economy, and left others quietly pondering what happens if they, too, wind up in the crosshairs.

He blasted General Motors on Jan. 3 for making a much smaller number of U.S.-sold Chevrolet Cruze hatchbacks in Mexico. He condemned Toyota two days later for opening a new plant in Mexico (though he got the location wrong).

“I think Trump’s impact on the auto industry will be the number one question that auto executives here are asked,” said Michelle Krebs, a senior analyst at “You can feel his presence here.”

The auto industry supplies about 10 percent of manufacturing jobs in the United States. Still, invoking the steady decline of auto jobs stirs up powerful nostalgia.

“It’s a pretty iconic American industry,” said Josh Bivens, the research and policy director at the Economic Policy Institute, a Washington think tank. When Trump mentions the country’s gradual loss of car-making jobs, “he is harking back to the past, when the auto industry played a larger role in building the country.”

Other auto companies have used the show to trumpet investments in U.S. manufacturing.

When unveiling the latest version of the Camry, the most popular sedan in America, Toyota president Akio Toyoda told media here that the car has long been assembled at a plant in Georgetown, Ky., and emphasized that would continue with the new model.

“They make a Camry nearly every minute. It is this type of teamwork that has helped Toyota produce more than 25 million vehicles in the U.S. over the last 30 years,” Toyoda said, reiterating a statistic the company touted last week following Trump’s rebuke.

Toyota also said Monday that it would invest $10 billion in U.S. manufacturing over the next five years.

Earlier in the day, Ford revealed plans to bring the Ranger and Bronco truck lines back to the U.S. market in 2019 and 2020, respectively. The company also reminded the audience that it pledged to roll out 13 electric vehicles globally in the next five years. Both trucks and at least half of the electric vehicles will be produced in the United States, due in part to a $700 million investment that Trump hailed when it was announced by Ford last week.

Fiat Chrysler said Sunday it will grow plants in Warren, Mich. and Toledo, which are slated to produce Jeep trucks and SUVs, including the much-hyped luxury Wagoneer. The plan aligns with the company’s goal to focus more on trucks and SUVs as demand shrinks for smaller cars. (Fiat Chrysler would not provide details about the future 2,000 positions.)

“These investments and these products being built in Michigan and Ohio have always been planned — we’ve just been waiting for them to make the announcement,” said AutoTrader’s Krebs. “They’re just making sure they tout it earlier and louder so that President-elect Trump hears them.”

Otherwise, she said, the company could incur his wrath.

The automaker, which saw a 1.69 percent share value boost Monday morning, said it will also equip the Michigan factory to assemble Ram heavy-duty models, which are now made in Mexico — but only if demand spurs a production upswing, a company representative clarified Monday.

As of Sunday, the company has no plans to move any of its truck line north of the border.

Fiat Chrysler runs seven facilities in Mexico, according to its website, and shipped in 2015 nearly 477,000 vehicles. About 91 percent of those cars and trucks, a representative said, were sold in the United States.

Trump, meanwhile, has said he wants to punish companies that outsource manufacturing jobs with steep tariffs and “terminate” or renegotiate the North American Free Trade Agreement, which enables a flow of goods between the United States, Mexico and Canada. Since late November, the president-elect has singled out individual firms on Twitter and reached a shadowy deal with Carrier, the air conditioning company, to keep 800 jobs earmarked for Mexico in Indiana.

More on Wonkblog:

The real reason Ford abandoned its plant in Mexico has little to do with Trump

What Americans really think about free trade

A new theory for why Trump voters are so angry — that actually makes sense

Japan's government has hit back at President-elect Donald Trump, who's threatened to tax Toyota if the car company makes vehicles for the U.S. in Mexico. (Video: Reuters)