Trump Talks Deregulation With Auto Executives

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By Jaclyn Diaz

President Donald Trump told top executives from the Big Three automakers Jan. 24 that job creation and manufacturing will be “happening big league” and that environmental and permitting regulations will be curtailed to make the manufacturing process quicker and easier.

If automakers keep jobs and plants in the U.S., Trump said his administration will reduce taxes and other “unnecessary regulations” that slow the manufacturing process. Trump referred to himself as “an environmentalist” but said current regulations are “out of control.”

“It’s the long-term jobs that we’re looking for. We’re bringing manufacturing back to the United States big league, we’re reducing taxes very substantially and we’re reducing unnecessary regulations,” Trump told the group. “And we want regulations but we want real regulation” that means something. “We’re going to make the process much more simple for the auto companies and for everybody else who wants to do business in the United States.”

Certainty Good for Business

What the auto industry looks for is certainty in the regulatory environment, Kristin Dziczek, director of the Industry, Labor & Economics Group at the Center for Automotive Research, told Bloomberg BNA Jan. 24. “If the Trump administration pulls back hard, and the next administration in four to eight years makes another abrupt change in course, that’s not good for the autos,” she said.

The meeting at the White House included Mary T. Barra, chief executive officer of General Motors Co., Sergio Marchionne, CEO of Fiat Chrysler, and Mark Fields, CEO of Ford Motor Co. They were joined by Matt Blunt, president of the American Automotive Policy Council, Steve Bannon, Trump’s senior counselor, and other administration staffers.

The morning was not all business. At the start of the meeting Trump sat down and playfully said to two of the executives, “Start building in the U.S.”

Tariffs May Bring Retaliation

Since winning the election, Trump has posted on Twitter criticizing automakers including Ford, Germany’s BMW AG and Toyota for building cars or factories in Mexico. He has also threatened high tariffs for auto manufacturers importing from other countries.

“Tariffs will likely be met with retaliatory trading practices, and tariffs on one trading partner (say, Mexico) would just increase the flow of imports from other countries that produce those goods—and often have lower U.S. content in their products,” Dziczek said. “Every global auto production region has a ‘Mexico' (a low-cost source of content), and it would be difficult to compete globally without employing a low-cost or best-cost strategy, as well.”

Toyota announced Jan. 24 plans to invest $600 million and add 400 jobs at an assembly plant in Princeton, Ind., after facing criticism from Trump earlier this month. The plan is part of a $10 billion investment in the U.S. over the next five years. (See related story.)

The executives left the meeting expressing interest to work with Trump and Congress moving forward, but they did not divulge any explicit plans or promises.

“The U.S. is our home market and we are eager to come together to reinvigorate U.S. manufacturing. We all want a vibrant U.S. manufacturing base that is competitive globally and that grows jobs. It’s good for our employees, our dealers, our suppliers and our customers,” Barra said in a statement released after the meeting.

Representatives of the United Auto Workers were not at the meeting. A spokesman told Bloomberg BNA the UAW had no comment on the meeting Jan. 24.

To contact the reporter on this story: Jaclyn Diaz in Washington at jDiaz@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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