DETROIT -- In another tweet targeting a U.S. company, President-elect Donald Trump is threatening to slap a tax on General Motors for importing compact cars to the U.S. from Mexico.
But GM makes the vast majority of compact Chevrolet Cruzes at a sprawling complex in Lordstown, Ohio, east of Cleveland.
to the U.S. tax-free. He told GM to make the cars in the U.S. "or pay big border tax!"
GM imports only hatchback versions of the Cruze from a factory in Ramos Arizpe, Mexico, and it sold only about 4,500 of them in the U.S. last year, spokesman Patrick Morrissey said. The company sold about 172,000 Cruzes through November. The hatchback, which went on sale in the U.S. in the fall, is built in Mexico for global distribution, Morrissey said.
GM shares fell by about 1 per cent in premarket trading immediately after the tweet, but bounced into positive territory after the market opened Tuesday.
Cruze hatchback production amounts to less than a day of output at the Lordstown plant, said Glenn Johnson, president of a United Auto Workers union local at the factory. The union, he said, is not protesting the move to build the hatch in Mexico.
"It makes for news, that's all," Johnson said of Trump's tweet. The Lordstown factory, he said, is not equipped to build the hatch.
GM did import some Cruze sedans from Mexico last year to meet demand as it was rolling out a new version of the compact car, Morrissey said, but that has stopped and all sedans sold in the U.S. are now made in Ohio, he said.
The tweet was the latest threat from Trump to tax companies that move production to Mexico and ship products back to the U.S. under the North American Free Trade Agreement. Last year Trump went after Ford for plans to shift production of the compact Focus to Mexico. Jobs at the Detroit-area factory that now makes Focuses would be preserved because the plant is to get a new small pickup truck and SUV. Ford's CEO says the company will not change the plans.
Trump's targets have ranged from U.S. retailers and defence contractors, to tech companies. Amazon.com, Boeing and Macy's have been the subject of Trump tweets in the past.
Last year Trump touted a deal to keep 800 jobs at the Carrier furnace factory in Indianapolis from going to Mexico. He has promised to lower corporate tax rates to preserve factory jobs inside the United States, while threatening harsh penalties for companies that produce goods overseas to save on labour costs. On Twitter, Trump warned that he will impose a 35 per cent tariff on the goods imported by companies that outsource production.
In November, GM said it would lay off about 1,250 workers at the Lordstown plant due to sagging demand for cars as U.S. buyers take advantage of low gasoline prices to buy trucks and SUVs. The workers on the third shift at Lordstown will go in indefinite layoff starting Jan. 23, although some may move to other GM factories.
Sales of the Cruze were down more than 18 per cent through November.
Shifting demand from cars to trucks and SUVS is forcing General Motors to lay off more than 2,000 workers. Last month, 61.5 per cent of U.S. new vehicle sales were trucks and SUVs, according to Autodata Corp., and analysts say there's no sign that will change anytime soon.
Donald Trump has singled out several companies individually before and after winning the U.S. presidential election. Here's a quick rundown of the businesses he's targeted and what he has said.
Amazon
"If @amazon ever had to pay fair taxes, its stock would crash and it would crumble like a paper bag. The @washingtonpost scam is saving it!" on Dec. 7, 2015.
Carrier
"Big day on Thursday for Indiana and the great workers of that wonderful state. We will keep our companies and jobs in the U.S. Thanks Carrier." on Nov. 29, 2016.
Ford Motor Co.
"Just got a call from my friend Bill Ford, Chairman of Ford, who advised me that he will be keeping the Lincoln plant in Kentucky - no Mexico. I worked hard with Bill Ford to keep the Lincoln plant in Kentucky. I owed it to the great State of Kentucky for their confidence in me!" on Nov. 17, 2016
Lockheed Martin Corp. and Boeing Co.
"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!" on Dec. 22, 2016.
"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!" on Dec. 6, 2016.
General Motors Co.
"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!" on Jan. 3, 2017.
Macy's Inc.
"Good news, disloyal @Macys stock is in a total free fall. Don't shop there for Christmas!" on Dec. 4, 2015.
T-Mobile US
@JohnLegere @TMobile John, focus on running your company, I think the service is terrible! Try hiring some good managers. on Nov. 15, 2015
Rexnord
"Rexnord of Indiana is moving to Mexico and rather viciously firing all of its 300 workers. This is happening all over our country. No more!" on Dec. 2, 2016.
Businesses in General
"The U.S. is going to substantialy reduce taxes and regulations on businesses, but any business that leaves our country for another country, fires its employees builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S....without retribution or consequence, is WRONG! There will be a tax on our soon to be strong border of 35% for these companies...wanting to sell their product, cars, A.C. units, etc., back across the border. This tax will make leaving financially difficult, but...but these companies are able to move between all 50 states and negotiate a tax free deal! Our country cannot keep losing these jobs, & won't. These companies are able to move between all 50 states, with no tax or tariff being charged. Please be forewarned prior to making a very....expensive mistake! THE UNITED STATES IS OPEN FOR BUSINESS." on Dec. 4, 2016.
