Newly crowned Fiat Chrysler CEO Mike Manley and his industry counterparts are facing a crisis worthy of the main plot line in the hit TV series “Game of Thrones.”
Under the old economic world order, Manley, like his predecessor Sergio Marchionne, would have faced formidable, but predictable adversaries: Global and domestic competitors, technological change, maintaining costs, government regulation and the ups and downs of market forces.
But there’s a new threat to the realm, a threat as unpredictable and menacing as that army of undead White Walkers advancing on Westeros.
This foe is just as unpredictable and potentially destructive as George R.R. Martin’s Night King. Instead of a crown of spikes, he wears a suit. Instead of Dragons, he threatens to lay waste to the entire realm through tariffs, trade wars and tearing down the world economic order.
U.S. President Donald Trump is that king.
Trump is “weaponizing” uncertainty in his campaign to force U.S. companies to repatriate manufacturing, said a recent report by the C.D. Howe Institute.
“U.S. trade policy has been characterized by implausible claims, demands, and threats, which are then retracted, then re-asserted, and so on,” the report said.
Even the fearless Marchionne could not bear to contemplate the end of the 24-year-old North American Free Trade Agreement, credited with bringing prosperity to Canada, the United States and Mexico.
“I can’t imagine what a world without NAFTA looks like,” Marchionne told reporters during the 2018 North American International Auto Show (NAIAS) in Detroit.
The previous year at NAIAS, Marchionne warned that if Trump were to make good on his threat to slap import tariffs on vehicles shipped to the United States, it would be “lethal” to FCA’s Windsor Assembly Plant, the single largest private-sector employer in the southwestern Ontario city.
At the Section 232 public hearings held in Washington July 19, representatives of global automakers as well as officials from Mexico, Europe, Asia and Canada warned of catastrophic job and production losses that would ensue from a 25-per-cent import tariff.
Citing statistics compiled by the Ann Arbor, Mich.-based Center for Automotive Research, speaker after speaker warned that tariffs would send car prices in the United States soaring, chop sales by two million units and wipe out more than 700,000 jobs at car makers, parts manufacturers and dealerships.
Canada also would suffer, because half of the $35 billion in annual domestic auto-parts production and about 85 per cent of the two million vehicles assembled are shipped across the border.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, warned in June that import tariffs would lead to “carmageddon.”
Canada and other countries would have little choice but to retaliate against any U.S. trade actions, he said.
“Game of Thrones” fans will have to wait until the final season to see if King of the North Jon Snow will succeed in bringing together traditional rivals against the ultimate threat to humanity.
“There is only one war that matters — the Great War and it is here,” he tells Queen Cersie, his southern rival.
In this real-life drama with Trump, a global alliance of Europe, Asia and North America trading partners is the only hope for preventing Trump's protectionist sword from decimating the auto industry.