President Donald Trump included a shout-out to Detroit’s auto industry in his State of the Union address on Wednesday last week, saying he “halted government mandates that crippled America’s great, beautiful autoworkers, so we can get the Motor City revving its engines once again.”
Michigan’s auto companies had been in the middle of a resurgence before Trump was elected in November 2016, having had record sales and seven years of growth after General Motors and Chrysler were steered through structured bankruptcies — and aided by billions in federal investment — by former President Barack Obama’s administration.
Trump wasn’t specific about which regulations he was referring to, but his administration has moved to relax fuel efficiency standards mandated under earlier rules for cars and light trucks in model years 2021-2025 — help that carmakers said they wanted, though environmentalists and state officials in California have protested the change.
Whether that has led to any increase in auto production is unclear, but what is not is another mention made by Trump about Michigan — that Fiat Chrysler was moving production from Mexico to the state. Earlier this month, FCA said it was investing more than $1 billion to modernize the Warren Truck Plant and adding 2,500 jobs as it moved production in 2020 of its Ram Heavy Duty trucks — a move the company said was made possible by a new federal tax law that slashed the corporate tax rate from 35 to 21 percent.
“In Detroit, I halted government mandates that crippled America’s auto workers — so we can get the Motor City revving its engines once again,” Trump said.
“Many car companies are now building and expanding plants in the United States — something we have not seen for decades. Chrysler is moving a major plant from Mexico to Michigan; Toyota and Mazda are opening up a plant in Alabama. Soon, plants will be opening up all over the country. This is all news Americans are unaccustomed to hearing — for many years, companies and jobs were only leaving us. But now they are coming back,” he added.
In addition to FCA’s Warren announcement, Toyota and Mazda announced plans to build a $1.6 billion plant in Huntsville, Alabama.
Some fear the potential effects of a reconfigured North American Free Trade Agreement that punishes vehicle importing.
“The president has scared car companies into assembling more vehicles in the US,” University of Michigan business professor Erik Gordon said in an email.
The Toyota-Mazda joint venture in Alabama is the only brand new standalone plant announced by a major automaker since Trump’s inauguration.
It’s not the first in decades. Several automakers have built new plants in the US in recent decades, including General Motors, Toyota, Honda, BMW, Mercedes-Benz and Volkswagen.
DETROIT FREE PRESS/TNS