During his campaigning days, Donald Trump was quite clear the way he was going to implement new policies to secure jobs in the United States of America. He targeted industries that require the most man power and ensured those company’s invest heavily in the country. The auto-industry was of course on top of his head while announcing those jobs. It seems his plan worked as eight of ten states that put Donald Trump to power last November is where most of the auto manufacturing facilities are located and these states have the most employment in automobile sector as per Bureau of Labour Statistics, USA. Then President-Elect Donald Trump had more than once threatened auto-makers to impose 35 percent border tariff on products imported from Mexico and was also willing to renegotiate North America Free Trade Agreement (NAFTA). President Donald Trump argued that agreements like NAFTA have led to the loss of millions of American jobs in the overall manufacturing sector. In fact, during his first few days as the President, Donald Trump had a big meeting with industry leaders like, General Motors CEO – Mary Bara, founder of Tesla – Elon Musk, then CEO of Ford Motor Company – Mark Field and Fiat Chrysler Automobile CEO – Sergio Marchionne.
The meeting was to discuss ways to increase companies’ investment in USA, to build new manufacturing plants to generate jobs in the automobile sector. President had commented that “We have planned a big push on to have auto plants and other plants — many other plants in America”. Now it seems to have been working for Donald Trump as the companies have started investing money on their existing and building new manufacturing hubs. Earlier, General Motors had announced an investment of $1 billion and had promised to create about 1000 new jobs.
Ford Motor Company also cancelled its investment of $1.6 billion in Mexico and instead confirmed an investment of $700 million at its plant in Michigan which will create close to 800 jobs in next 3-4 years and most recently Toyota Motor Corp along with Mazda will invest $1.6 billion in a new electric vehicle assembly plant in USA. The plant was a surprise for investors at a time of declining sales in the country, but marked good news for U.S. President Donald Trump who came to office on the back of promises to bring back manufacturing jobs for U.S. workers. Trump tweeted saying “great investment in American manufacturing”. Many states in America prefer to have auto assembly plant they usually pay above the average wage and create additional jobs at suppliers and other service companies. Midwestern states like Ohio and Michigan also provide incentives like tax-breaks and publicly funded training programs.
The location of Toyota’s new plant is still unknown but the company has confirmed that it will have an annual capacity of 300,000 vehicles and will employee about 4,000 people. The manufacturing unit will commence operations from 2021. Toyota has already been investing a lot in developing hydrogen-fuel cell vehicles, while rivals like Volkswagen AG, Tesla and Nissan Motor Company have gone the pure electric way to bring in zero-emission vehicles globally. Toyota Motor Corp currently has ten plants in USA in an arc that runs from West Virginia through Kentucky, Indiana, Alabama, Mississippi and Texas. For Toyota, the investment is a push to expand U.S. vehicle-making capacity, gain market share and intensify its attack on the Detroit automakers’ lucrative auto business. Toyota has already invested $23.4 billion in its U.S. operations, and has planned another $11.6 billion in investment over the next five years, fueled by robust profits. This political ploy will also help Mazda and Toyota to stay ahead in the electric vehicle race as tighter global emission norms loom over global carmakers.
German automakers like BMW, Daimler are contemplating to further increase its presence in the U.S market by bringing in more electric vehicles and technologies like autonomous driving which will require hefty investments to rival the likes of Google and Tesla. However, BMW is also sticking to its announced investment in Mexico and USA. In an Automotive congress meet in Germany earlier this year BMW Chief Executive Harald Krueger commented that “We need free world trade,” adding that the company would also invest in its U.S. Spartanburg plant. BMW exports over 70% of its annual production from the Spartanburg plant. Volkswagen is also considering investing at its Chattanooga, Tennessee plant to build additional SUVs at its only U.S. Plant.
The threat to impose cross-border taxes and renegotiating NAFTA might have had many criticisms globally but have also helped Mr.Trump in securing and bringing in many U.S jobs.