WASHINGTON/DETROIT/TORONTO -- Canada isn’t likely to be greatly affected by U.S. President Donald Trump’s demand that the Detroit Three keep — and add — production in the United States, says an economist covering the Canadian auto industry.
Trump met at the White House Tuesday with the CEOs of the Detroit Three automakers to outline his ideas.
”We have a very big push on to have auto plants and other plants -- many other plants," Trump told reporters at the meeting. "It's happening."
Before the session, he tweeted: “I want new plants to be built here for cars sold here!”
Carlos Gomes, a Scotiabank senior economist who covers the transportation sector, said there wasn’t much chance Canada was going to land a new assembly plant from Ford Motor Co., General Motors or Fiat Chrysler Automobiles any time soon anyway.
Besides, he said, the Detroit Three recently committed $2 billion to upgrade their manufacturing facilities in Ontario as part of three collective bargaining agreements ratified by union workers last fall.
“I wouldn’t say we’re priced out of expansion. We will get additional investment going forward,” Gomes said of the contract promises.
“But, I think the reality is, in terms of getting a new assembly plant, that might be difficult. You’re essentially going to see investment in plants we do have. A new assembly plant might be a bit of a stretch at this point especially with [Trump’s] focus being on more investment in the States.”
Gomes suspects the meeting was as much about Trump calling for spending in the United States as it was about Ford’s Mark Fields, GM’s Mary Barra and FCA’s Sergio Marchionne explaining to Trump how integrated the auto industry is among the United States, Canada and Mexico.
“Fine, Trump can tell the industry, ‘We’d like you to do that,’ but part of the job of the industry is to educate him on the importance of how the industry works to the benefits of American workers,” Gomes said.
Canadian Minister of Innovation, Science and Economic Development Navdeep Bains told CBC’s Power & Politics host Rosemary Barton on Tuesday afternoon that Canada shouldn’t worry.
He said Canada’s strong supply base, automotive research being done at Canadian colleges and universities, and programs like the Automotive Innovation Fund make Canada attractive to U.S. automakers.
“The point I’m making is that the automotive sector takes many factors into consideration and that’s why we’ve seen significant investments in Canada,” he told Barton.
Tax reform, regulations
The heads of Ford Motor Co., Fiat Chrysler Automobiles and General Motors attended the meeting at the White House. The meeting presented Detroit’s automakers with a key opportunity to weigh in on major issues the administration plans to tackle in its earliest days, including trade, regulatory and tax reforms.
“He looks forward to hearing their ideas, on how we can work together to bring more jobs back to this industry in particular,” White House press secretary Sean Spicer said.
Trump told the CEOs that environmental regulations are "out of control" and promised he would remove obstacles for manufacturers and oil companies. The president reiterated his desire to reduce regulations, which may indicate a willingness to scale back federal fuel-economy demands.
“I am, to a large extent, an environmentalist,” Trump told the auto executives. “I believe in it. But, it’s out of control.”
Automakers in recent weeks have urged the Trump administration to rethink aggressive fuel efficiency mandates.
Tuesday's gathering was the first time the CEOs of the big three automakers have met jointly with a U.S. president since a 2011 session with Barack Obama to tout a deal to nearly double fuel efficiency standards by 2025.
Ford CEO Mark Fields discussed corporate tax reform, the need for “data-driven regulations” and trade policy initiatives that address foreign currency manipulation, Ford spokeswoman Christin Baker said. GM CEO Mary Barra and Chrysler CEO Sergio Marchionne also attended.
Marchionne told reporters after the meeting that Trump did not give them specifics on what regulations he would cut.
GM, Ford and FCA have all announced recent new jobs and investments in the United States, but are still investing in Mexico. Fields said automakers wanted to work with Trump to create a "renaissance in American manufacturing."
"We're very encouraged by the president and the economic policies that he's forwarding," Fields told reporters, praising Trump's decision to withdraw from the Trans-Pacific Partnership agreement, which Fields said did not address intervention in currency valuations by trading partners. "As an industry we're excited about working together with the president," he said.
Barra said there was a "huge opportunity" to work together with the government to "improve the environment, improve safety and improve the jobs creation."
Trump met Monday with prominent American manufacturers including Fields and Elon Musk, the head of Tesla Motors Inc., and said he would dramatically cut regulations and corporate taxes. But Trump said manufacturers would face tough penalties if they move production outside the country.