In recent months, automakers have announced plans to invest billions of new dollars in the U.S. and create thousands of new jobs — developments for which Trump has, at least in part, taken credit.However, in nearly every case those investments were either in the planning stages for months or were made possible by changing market conditions, though [Ford CEO Mark] Fields has said that a belief that Trump will improve the business climate in the U.S. has also played a role in Ford’s decisions.
New assembly plants cost General Motors Co., Ford Motor Co. or Fiat Chrysler Automobiles NV about $1 billion — the sort of investment companies look to avoid making as a market peaks. And while factories boost jobs, economic gains from building them are being undercut by automation and pressure to compete with lower-wage countries including Mexico.“This is the nightmare scenario for auto companies, which are being asked to make huge capital investments right before a slowdown in sales,” said Dan Luria, an analyst who has advised the United Auto Workers union. “It seems like hardly the time to spend billions on new plants.” …After the U.S. auto market’s 68 percent surge since 2009, sales will be roughly flat through 2020, researcher LMC Automotive said in a report last week. After setting a record with nearly 17.6 million vehicles last year, the industry will keep coming up short of that level through the end of the decade, LMC said.
There probably wouldn’t be a Cruze hatchback if GM had to build it in the United States. The Cruze hatch is the poster child for why interconnected global manufacturing footprints make automakers stronger. Chevy sold about 184,300 Cruze sedans in America last year — all built in Lordstown, Ohio. It brought 4,500 hatchbacks in from Mexico. GM wouldn’t have invested millions of dollars for that few vehicles at its plant in Lordstown, Ohio, but it makes sense to build them in Mexico, where that body style is popular and they sell well.Without Mexican production, the 4,500 Americans who bought Cruze hatchbacks might be lost to other car brands.