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Trump’s Tweets At Automotive CEOs Face New Industry Complexities

President Trump continues his intense policy and communications focus on carmakers as a key to his manufacturing-job renaissance.

President Trump continues his intense policy and communications focus on carmakers as a key to his manufacturing-job renaissance.It’s getting more difficult for Donald Trump to effectively jawbone automotive CEOs these days, as the industry’s competitive environment and companies’ own situations dictate oblique and complex – and sometimes silent – responses from his targets. Meanwhile, the president continues his intense policy and communications focus on carmakers as a key to his manufacturing-job renaissance.

In fact, on Wednesday Trump planned to visit a booming General Dynamics defense plant that is adding hundreds of jobs in Lima, Ohio, presumably in part to change the national conversation about how a General Motors plant in Lordstown, Ohio, just closed on his watch. General Dynamics CEO Phebe Novakovic was said to be planning to join the president.

Trump the campaigner pushed automotive companies to the forefront by complaining about their car production in Mexico and the one-sidedness of the NAFTA trade agreement. He said it allowed expansion of investments and jobs south of the U.S. border while American manufacturing workers in the heartland – crucial to Trump’s electoral base – were coveting those jobs.

Trump the president has praised the decisions of car-company CEOs, or has bashed them, for the last two years largely depending on the moves’ impacts on U.S. employment. Most recently, he had a Sunday-evening conversation with GM CEO Mary Barra a couple of months ago excoriating her for a decision to close a handful of plants and eliminate thousands of blue-collar jobs. One of the plants, GM’s storied facility in Lordstown, made its last Chevrolet Cruze compact sedan last week. Trump had once vowed to bring jobs back to the plant and at the time urged Lordstown workers not to sell their homes.

Predictably, Trump targeted Barra’s company again, and United Auto Workers leaders, in weekend tweets urging a reopening of Lordstown “because the economy is so good” or “maybe [sell it to] a new owner.”

Of course, Barra would love to do exactly that – if her duties to GM shareholders and the rest of its employees would allow her. But she made the tough decision to downsize the company now, especially in sedan production, to attempt to catch up with the fact that American consumers these days overwhelmingly prefer utility vehicles and trucks. She is doing this to get ahead of the fact that U.S. auto sales have leveled off and future sales trends look increasingly uncertain, and to salt away some extra resources for the industry’s epochal transition to electric and autonomous vehicles.

Barra hasn’t openly answered Trump because that’s the hand she’s been dealt. And his angst over layoffs in industrial Ohio, Ground Zero for his electoral base, isn’t going to change that.

Meanwhile, other automotive CEOs are finding ways to stay out of the president’s Twitter stream. Ford CEO Jim Hackett, while notably still finding his way to a describable overall strategy for the company, has authorized his manufacturing people to boost production of large SUVs in Louisville in part by adding 550 workers to the line.

But while those are fantastic optics for warding off a tweet from the president, who has vociferously picked on Ford before, there is a major twist. All of those “extra” workers building Ford’s huge Expedition and Lincoln Navigator SUVs – which are selling like hot cakes – actually will be borrowed from the company’s second plant in Louisville, which makes the smaller Ford Escape utility vehicle. And Escape isn’t selling as well as it once did; Ford also is clearing out the old model for a new one that will be introduced later this year.

Trump is also likely to steer clear of criticizing the third member of the traditional Detroit Three, Fiat Chrysler. Not only has the company recently emerged as one of the financially healthiest automakers while riding sales of its high-profit Ram pickups and Jeep SUVs, but also Fiat Chrysler just committed to refurbishing an old engine plant in Detroit and making it an assembly line for a new class of big Jeeps. City leaders in Motown and even, according to a new poll, local residents are thrilled at the prospect.

Toyota is another company that seems immune for now to complaints by the American president. It just announced an expansion of its mid-term commitment to investing in its U.S. plant network, beefing up planned investments to $13 billion in the period from 2017 through 2022, up from a previous plan of $10 billion. Seemingly on cue, the president praised the expansion ion a tweet as “BIG NEWS for U.S Auto Workers!”

Toyota will add nearly 600 new workers. Not surprisingly, in the same tweet in which Trump criticized GM over the weekend, he praised Toyota again.


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