How will Trump's Carrier deal affect planned auto industry moves?
Ford executives say that their plan to shift production of small cars, like the Focus, to a new plant in Mexico will go on as planned, while acknowledging that their earlier decision not to move production of a different car from Kentucky to Mexico was influenced by President-elect Donald Trump.
The announcement came a day after Carrier Corp. 鈥� like Ford, a frequent target for Mr. Trump on the campaign trail 鈥� said it would keep open a furnace plant in Indiana, sparing about 800 employees鈥� jobs, in exchange for $7 million in tax breaks.
In the case of Ford, neither decision would have any effect on the jobs of US workers, CEO Mark Fields .
鈥淭his isn鈥檛 a Carrier situation,鈥� said Mr. Fields.聽鈥淲hen you look at moving the Focus out of our Michigan assembly plant, that鈥檚 to make room for new products 鈥� zero jobs affected, zero jobs impacted.鈥�
In November, the president-elect took credit for persuading Ford not to relocate the Louisville, Ky., plant to Mexico. In fact, the plant had only planned to relocate production of a Lincoln SUV 鈥� not the jobs of the people who made it 鈥� since the terms of a 2015 agreement with the United Auto Workers Union prohibited it from doing so without further negotiations with the union.
But Mr. Fields also said that Trump had 鈥溾�� Ford's decision to keep Lincoln SUV production in the US, applauding what he called favorable proposals from the president-elect on tax reform and infrastructure spending.
That may illuminate a key strategy for Trump鈥檚 brand of conservative populism: strike a hard rhetorical line on corporations while dangling a carrot of tax breaks and other favorable terms. And in the short term, at least, manufacturing execs may seek to cozy up to the new administration to spare their bottom line 鈥� and possibly reap the public-relations benefits.
Bill Ford, great-grandson of the automaker鈥檚 founder, penned a congratulatory letter to Trump after the elections, and even called him to say that the company wouldn鈥檛 shift Lincoln production to Mexico, according to the Journal.聽
But it鈥檚 unclear whether these early gestures might provide a model of personalized exemptions from Trump鈥檚 promise to impose big, industry-wide tariffs on vehicles and other goods imported from Mexico and China.
That possibility awakened concern from an unexpected corner on Friday, when former Alaska Gov. Sarah Palin 聽that despite her approval of the Carrier deal, 鈥減olitical intrusion using a stick or carrot to bribe or force one individual business to do what politicians insist 鈥� isn鈥檛 the answer.鈥�
鈥淲hen government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent,鈥� she wrote.
鈥淩epublicans oppose this, remember? Instead, we support competition on a level playing field, remember? Because we know special interest crony capitalism is one big fail.鈥�
Fields warned that Trump鈥檚 tariff proposals would have a 鈥渘egative impact鈥� on the US as well as in Mexico and Canada, , pointing to the deep integration of production and supply chains across the three countries.
鈥淚t would be imposed on the entire industry, not just singling out a single company,鈥� he said.
Other Ford execs struck a confident tone about the new administration鈥檚 policies.
"I think governing and the campaign are two different things," Ford's chief financial officer, Bob Shanks,聽. "I am hopeful and optimistic that this change in tone will carry forward into policies that 鈥� will be quite different than the prior administration but will be positive for growth."
