Fiat CEO Warns May Shut All Mexico Production If Trump Tariff Too High

Zero Hedge ^ | 1/9/2017 | Tyler Durden

[lafroste]

Agree with his proposed policies or not, it's difficult to argue that Trump is delivering on his promises to the autoworkers of the Midwest who single-handedly voted him into the White House. Before even taking office, the mere threat of import tariffs has caused Ford to cancel the construction of a $1.6 billion new facility in Mexico, and has automotive CEO's from Toyota to Chrysler walking on eggshells as they carefully try to flaunt all of the capital investments they're making in U.S.-based facilities.

While likely secretly hoping for the status quo, Fiat Chrysler's U.S. CEO, Sergio Marchionne, admitted earlier today that if Trump's import tariffs are "sufficiently large" he would be forced to shutter all of his manufacturing capacity in Mexico as it would be rendered "uneconomical." Per the FT:

Fiat Chrysler may close its Mexican car plants if Donald Trump imposes sufficiently stringent tariffs on vehicles coming into the US, chief executive Sergio Marchionne said on Monday.

“It’s possible that if economic tariffs are imposed…and are sufficiently large, it will make production of anything in mexico uneconomical and we would have to withdraw,” he said in Detroit on Monday. “It’s quite possible.”

[TaMoDee]

Yup! FIAT = Fix It Again Tony!

[saleman]

I have no problem with foreign companies exporting products to the U.S. Fairly. Without “dumping”, selling products under production costs by using Government subsidies. I’m not sure Trump has targeted Fiat for tariffs. Never heard Trump say anything about Fiat. I could be wrong..

[saleman]

Whoops. Didn’t realize that Chrysler now owned Fiat.

Never mind........

[az_gila]

How big can the car market be in Mexico? The only reason companies are building down there is to avoid US production (higher wages and regulations). Without NAFTA, there wouldn't be car production in Mexico.

GM needs to take notice...

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It seems to be about 1/6 the size of the US market. Quite a significant number at around 100,000 new registrations per year.

[central_va]

US auto/trucks sales per year averages around 17 million. Mexico, 1 million. 1/17 of US sales.

[GreenHornet]

There is some speculation that FCA (Fiat Chrysler Automobiles) is on shaky financial ground as it is. The Chrysler brand is now down to two models: The 300, and the Pacifica minivan. The Pacifica is new, but the 300 has kept the same basic design for nearly ten years. Dodge has a more varied lineup, but it has also continued on without a major redesign of any of its models for way too many years. The Fiat brand hasn’t exactly set sales records in this country. Jeep and Ram are moneymakers, but that’s it. I suspect FCA CEO Sergio Marchionne may use the tariff as the excuse for pulling the plug on FCA in North America. It’s possible that Chrysler and Dodge will be shut down, with Jeep and Ram sold off to another automaker.

[Reno89519]

Okay, what’s too high and let’s set it immediately. And no L1 visas or H1B. Implement eVerify for current and future perm, part-time, and contract or subcontractor workers.

[captain_dave]

Government creates poverty and the Mexican government has made Mexico poor for centuries.

[Mollypitcher1]

I’d like to see Jeep belong to America again. Such an iconic symbol of WW II should never be owned by anyone else.

[Mollypitcher1]

LOL In my day we used to call FORD, Fix Or Repair Daily.

[Mollypitcher1]

LOL In my day we used to call FORD, Fix Or Repair Daily.

[Mollypitcher1]

Also, FORD, Found On the Road Dead.

[az_gila]

I was looking at auto sales data here -

http://www.tradingeconomics.com/united-states/car-registrations

...but didn’t correct for monthly vs. yearly numbers...:^(

Still comes out as 7:1 though.

Perhaps because it’s passenger car numbers only, and not trucks?

[Forward the Light Brigade]

Make the tax high! So high that people will re-think using cheap Mexican Labor to make things. Focus on Toyota now—force them to set their factory in America and not Baja Mexico! BUILD THE WALL! Man the wall, Make it a Great wall that will not be breached a Maginot Wall that can not be passed by man, beast or little boys.

[Chode]

it's casue they don't, Fiat owns Chrysler

[BwanaNdege]

“I’d like to see Jeep belong to America again.”

***************************************

https://www.4wd.com/jeepresource/jeep-history.aspx

Designed by Karl Probst for Bantam, WWII production by Willys-Overland and Ford.

Ownership changes

In the second half of the 20th century, Jeeps continued to influence the way Americans used their automobiles. But despite the Jeep’s widespread influence, the ownership behind these popular vehicles remained in flux.

Kaiser-Frazier, an independent carmaker, purchased Willys-Overland in 1953 and changed the name to Willys Motor Company. The name changed again in 1963 to Kaiser-Jeep.

Seven years later, Kaiser sold its struggling Jeep division to American Motors Corporation (AMC).

AMC was then absorbed by Chrysler Corporation in 1987. In the years that followed, Chrysler would go through ownership changes of its own,

first merging with Daimler-Benz and then selling majority ownership to an equity sponsor to become Chrysler Group LLC.

Then Jan 21, 2014, FIAT bought Chrysler.

Fiat owns: Alfa Romeo, Chrysler, Dodge, Ferrari, Jeep, Lancia, Maserati, Ram and SRT