Monday 29 May 2017

Donald Trump threatens GM with tax over 'car imports' from Mexico

Donald Trump's corporate targets have ranged from US retailers and defence contractors to tech companies
Donald Trump's corporate targets have ranged from US retailers and defence contractors to tech companies

Donald Trump has threatened to slap a tax on General Motors for importing compact cars to the US from Mexico.

The US president-elect tweeted that GM is sending Mexican-made Chevrolet Cruzes to the US tax-free, and ordered the firm to make the cars in the US "or pay big border tax".

However, GM makes the vast majority of Cruzes in Lordstown, near Cleveland, Ohio.

The firm only imports the hatchback version from a factory in Ramos Arizpe, Mexico, which represents a small percentage of the 172,000 Cruzes sold by GM in the US, spokesman Patrick Morrissey said.

The hatchback is built in Mexico for global distribution, Mr Morrissey added.

Cruze hatchback production is equivalent to less than a day of output at the Lordstown plant, said Glenn Johnson, president of a United Auto Workers union branch at the factory. The union, he said, is not protesting against the move to build the hatchback in Mexico.

"It makes for news, that's all," Mr Johnson said of Mr Trump's tweet. The Lordstown factory, he said, is not equipped to build the hatchback.

GM did import some Cruze saloons from Mexico last year to meet demand as it was rolling out a new version, Mr Morrissey said, but that has stopped and all saloons sold in the US are now made in Ohio.

The hatchback version just went on sale in the autumn.

The tweet was the latest threat by Mr Trump to tax car makers that move production to Mexico and ship products back to the US under the North American Free Trade agreement.

Last year he went after Ford for plans to shift production of the compact Focus to Mexico. Jobs at the Detroit-area factory that now makes the Focus would be preserved because the plant is to get a new small pick-up truck and SUV.

Mr Trump's targets have ranged from US retailers and defence contractors, to tech companies. Amazon, Boeing and Macy's have been the subject of his tweets in the past.

AP

Meanwhile, Ford has cancelled plans to build a new 1.6 billion dollar (£1.3 million) factory in Mexico and will invest 700 million dollars (£573 million) in a Michigan plant to build new electric and autonomous vehicles.

Ford still plans to shift production of the Focus to Mexico and will make the car at an existing plant.

The company made the announcements at a factory in Flat Rock, near Detroit. The factory will get 700 new jobs.

Among the new vehicles it will make are a fully electric small SUV with a 300-mile range.

Ford also plans a petrol-electric hybrid version of the F-150 pick-up.

AP

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