Trump Goes After General Motors

President-elect warns of consequences for building in Mexico, shipping to America

by Kathryn Blackhurst | Updated 03 Jan 2017 at 5:55 PM

In a tweet Tuesday morning, President-Elect Donald Trump threatened General Motors with a “big border tax” if the company chooses to send its Mexican-made Chevrolet Cruze models tax-free across the border.

Trump said the car manufacturing company purposely ships those models to the United States after assembling them across the border to take advantage of tax reductions. If this is truly the case, the president-elect made it quite clear he would not tolerate such behavior.

“Make in U.S.A. or pay big border tax!”

“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!” Trump tweeted.

Shortly after the tweet, Ford Motor Co. announced it is abandoning its plan to build a $1.6 billion dollar plant in Mexico, and instead is investing $700 million in a Michigan assembly plant.

Trump's focus on GM's manufacturing practices stems from his commitment to follow through on his campaign promises. Throughout the course of the general election, he particularly emphasized the need to instigate tax reforms, renegotiate trade deals that stunted American manufacturing, and bring jobs back to displaced American workers.

In response to Trump's complaint, GM issued a statement claiming that all of its Chevrolet Cruze sedan models are manufactured in a Lordstown, Ohio, plant. But for the Chevrolet Cruze hatchback model, there is a different story.

"General Motors manufactures the Chevrolet Cruze sedan in Lordstown, Ohio. All Chevrolet Cruze sedans sold in the U.S. are built in GM's assembly plant in Lordstown, Ohio," the statement read, before clarifying: "GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S."

GM sold roughly 190,000 Cruzes in the U.S. during 2016, the company told CNBC. Of those Cruzes, approximately 4,500 — or 2.4 percent — were hatchback models that were manufactured in Mexico.

Reuters reported that Trump transition team spokesman and incoming White House press secretary Sean Spicer stated, "In this case, the tweet was specific to General Motors. But I think you've seen an overall philosophy during the campaign and since he was elected to stand up for American workers and make sure that American companies don't benefit from moving their companies overseas and leaving American workers behind."

This is not the first time the president-elect has targeted companies via Twitter. After Trump called out the government's engagement in pricy defense contracts with Boeing and Lockheed Martin, both companies' stocks took an initial nosedive.

"Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!" Trump tweeted Dec. 6.

"Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F-18 Super Hornet!" Trump tweeted Dec. 22.

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  5. manufacturing
  6. mexico

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