Fiat Chrysler Pledges $1 Billion U.S. Investment as Inauguration Day Looms

CEOs, including Ford’s Mark Fields, have warned that discouraging cheap imports could damage the U.S. economy, though he and other business leaders appear to have adopted a more conciliatory stance as inauguration day approaches.

Trump, who will be sworn in on January 20, hasn’t let up on his campaign-trail threats to slap 35% imposts on Mexican-made cars. Last week, he criticized GM for making a version of its Chevrolet Cruze south of the border. “Make in USA or pay big border tax!” Trump said on Twitter.

Japan’s Toyota also drew fire from Trump for its plans to build a new Mexican facility, triggering a slump in its share price and those of other auto companies in Tokyo on Friday.

As reported in Chief Executive, Ford last week canceled a $1.6 billion factory in Mexico and said it would invest $700 million into a Michigan plant. Fields described the move as a “vote of confidence” in Trump and his policy plans, but insisted the company would have made the same decision in any case due to dwindling small-car sales.

“The expansion of our Jeep lineup has been and continues to be the key pillar of our strategy.

Fiat Chrysler’s plans also involve shifting the production of a pick-up truck to Michigan from Mexico. The Italian-American company will upgrade two factories, in Michigan and Ohio, by 2020 and create around 2,000 jobs, it said in a statement Sunday.

“The expansion of our Jeep lineup has been and continues to be the key pillar of our strategy,” CEO Sergio Marchionne said.

Mexico still features heavily in many company’s production profiles, indicating they may be hedging their bets in anticipation of a Trump presidency, rather than abandoning offshore production altogether.

Fiat Chrysler employs almost 12,000 workers across seven Mexican manufacturing facilities, according to its website. Ford, meanwhile, will continue to make small cars at an existing Mexican site.

And new Mexican plants aren’t being ruled out either.

A senior representative from BMW told the BBC this morning that the German company is “absolutely” committed to building a new $1 billion plant there. The facility, slated for San Luis Potosi, will make BMW’s 3 Series cars for sale across North America, according to sales and marketing director Ian Robertson.

He added, however, that BMW was investing a similar sum of money in a plant in South Carolina.

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Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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