The Strategist

Trump's criticism didn't scared GM away from Mexico

01/09/2017 - 14:19

General Director of American corporation General Motors (GM) Mary Barra said that the company is not going to revise plans on expansion of production abroad, despite criticism of the United States President-elect Donald Trump. "Automobile business requires long-term planning when choosing locations for production. Decisions are taken two or four years in advance", - quoted by AP.

Michael Kumm via flickr
Michael Kumm via flickr
Ms. Barra referred to Donald Trump’s statement against General Motors on duty-free import of cars from Mexico to the United States. "Make in the United States or pay higher border tax!" - he spoke out. Ms. Barra noted that GM produces only a small number of Chevrolet Cruze hatchbacks in Mexico, while all sedans of this model are manufactured in the US city of Lordstown (Ohio).

Mary Barra also expressed hope that her company will be able to find a common language with the 45th president of the United States regarding his goal to create new jobs. "We really want to become a part of a solution that will strengthen our country, business and our industrial capacity," - she said.

According to her, GM has already taken decisions on the production and made long-term investments in, which cannot be undone. "This is a capital-intensive business with long-term investment on which we made decisions two, three and four years ago", - she said.

Earlier, on January 3, Trump said that he would raise the border tax for General Motors because the company supplies American customers with Chevy Cruze made in Mexico without paying tax at the border. "Make in the United States or pay more border tax!" - Wrote the American president-elect on his page on Twitter. With warnings like this Trump has also turned to Toyota, which is planning to build a car plant in Mexico. 

During his election campaign, Trump promised to terminate agreement on the North American Free Trade Area (NAFTA), which allows free of duty import of cars made Mexico.

Trump said that he plans to introduce 35% duties on Ford, GM and other companies’ cars imported into the US from Mexican factories. In addition, he promises to ensure that production capacity of the US auto companies will returned to the United States.

Worried about higher taxes, on January 4Ford Motor Company decided to abandon construction of a new plant in Mexican city of San Luis Potosi. The company’s CEO Mark Fields said that decision was taken not only because of "trust" to Trump. He noted that small cars, which were planned to be made at the San Luis Potosi plant, may not be popular among American consumers. As explained Fields, Ford would cancel the construction even in case of Trump’s defeat.

Representative of President-elect’s transition team Sean Spicer previously stressed that the politician openly expresses his opinions and stands guard over interests of ordinary Americans.

"Our philosophy during the election campaign and after the election was to support American workers and control that US companies do not receive profit with withdrawal of production to other countries, leaving our workers with nothing," - said Spicer.