US President-elect Donald Trump on Tuesday blasted US carmaker General Motors Co and threatened to impose a “big border tax” for making some of its Chevrolet Cruze cars in Mexico. “General Motors is sending Mexican made model of Chevy Cruze to US car dealers-tax free across border. Make in USA. or pay big border tax!” Trump said in a post on Twitter. Shares of GM fell about 1 percent in premarket trading after Trump’s tweet. Donald Trump has singled out a number of companies individually before and after winning the US presidential election. His targets have ranged from US retailers and defense contractors, to tech companies. Amazon.com, Boeing and Macy’s have been the subject of Trump tweets in the past.
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!
— Donald J. Trump (@realDonaldTrump) January 3, 2017
GM imports only hatchback versions of the Cruze from a factory in Ramos Arizpe, Mexico, and it amounts to only a small percentage of the 172,000 Cruzes sold by GM through November, spokesman Patrick Morrissey said. He was working to get the exact number. The hatchback is built in Mexico for global distribution, Morrissey said.
Cruze hatchback production amounts to less than a day of output at the Lordstown plant, said Glenn Johnson, president of a United Auto Workers union local at the factory. The union, he said, is not protesting the move to build the hatch in Mexico.
“It makes for news, that’s all,” Johnson said of Trump’s tweet. The Lordstown factory, he said, is not equipped to build the hatch.
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GM did import some Cruze sedans from Mexico last year to meet demand as it was rolling out a new version of the Cruze, Morrissey said, but that has stopped and all sedans sold in the US are now made in Ohio, he said. The hatchback version just went on sale in the fall.
The tweet was the latest threat from Trump to tax automakers that move production to Mexico and ship products back to the US under the North American Free Trade agreement.
In November, GM said it planned in early 2017 to lay off 2,000 employees at two US auto plants, including one in Lordstown, Ohio, where it builds the compact Chevrolet Cruze.
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The shift is part of a larger trend among Detroit’s Big Three automakers to produce more small cars for the North American market in Mexico in an effort to lower labor costs, while using higher-paid US workers to build more profitable trucks, sport utility vehicles and luxury cars.
Last year Trump threatened to tax Ford, which plans to shift production of the compact Focus to Mexico. Jobs at the US factory that makes Focuses would be preserved because the plant would get a new pickup and SUV.
Trump in a series of tweets on December 4, 2016, said, “The US is going to substantialy reduce taxes and regulations on businesses, but any business that leaves our country for another country, fires its employees builds a new factory or plant in the other country, and then thinks it will sell its product back into the US…without retribution or consequence, is WRONG! There will be a tax on our soon to be strong border of 35% for these companies…wanting to sell their product, cars, A.C. units, etc., back across the border. This tax will make leaving financially difficult, but…but these companies are able to move between all 50 states and negotiate a tax free deal! Our country cannot keep losing these jobs, & won’t. These companies are able to move between all 50 states, with no tax or tariff being charged. Please be forewarned prior to making a very….expensive mistake! THE UNITED STATES IS OPEN FOR BUSINESS.”