Published: Tue, July 03, 2018
Money | By Ethel Goodwin

GM may slash American jobs because of Trump tariffs

GM may slash American jobs because of Trump tariffs

Global Automakers, which represents auto giants like Honda, Subaru and Toyota, blasted the Trump administration's investigation, saying that the Commerce Department has not spelled out its theory for how imported cars and trucks "are relevant to us national security".

The Department of Commerce is now accepting rebuttal comments for responses already submitted until July 6, and will hold public consultations in Washington in July. "Even the Toyota Camry, the best-selling auto in America, made in Georgetown, Kentucky, would face $1,800 in increased costs", Toyota said in a statement. Trump blasted Harley-Davidson's plan to move production of European-bound motorcycles offshore as waving the "white flag".

"The correlation between a decline in vehicle sales in the United States and the negative impact on our workforce here, which, in turn threatens jobs in the supply base and surrounding communities, can not be ignored", the company said in the statement.

"The overbroad and steep application of import tariffs on our trading partners risks isolating US businesses like GM from the global market that helps to preserve and grow our strength here at home", the company said. The union stopped short of endorsing sweeping tariffs, though, instead urging a "targeted" approach in its statement to the Commerce Department. Mostly luxury brands would be hit, such as Audi, BMW and Mercedes, "but higher import prices for parts could affect the pricing of mid-range vehicles produced in the USA like Volkswagen", the analysts wrote. The Camry is manufactured in a Toyota factory in Georgetown, Kentucky. "We want to explain how tariffs on auto imports may jeopardize them both".

GM fell 2.8% - to $39.40 - in NY on Friday, and has now posted three straight weekly declines, the longest such streak since March.

GM's message came as a surprise because the company has kept close contact with the Trump administration, Mr James Albertine, analyst with Consumer's Edge Research told Bloomberg TV.

Barra had earlier tried to stay on good terms with Trump.

Now, the Detroit-based maker of Chevrolet, Cadillac, Buick and GMC vehicles is warning that additional tariffs - on top of those recently slapped on steel, aluminium and Chinese products - could hurt GM and ultimately its customers.

In a filing with the U.S. Department of Commerce, the company said import tariffs "could lead to a smaller GM" with a reduced footprint at home and overseas, if the tariffs aren't "tailored" to advance economic and national security objectives. GM plans to combine "proprietary battery technology, a low-priced, flexible vehicle design and high-volume production mainly in China", Reuters reports, citing six current and former GM and supplier executives and six industry experts.

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