WASHINGTON -- President Donald Trump said in his first State of the Union address that the auto industry is a prime example of how the economy is benefiting from his trade and deregulation policies.
Automakers, he said, are investing domestically again because of the pro-business climate.
“Many car companies are now building and expanding plants in the United States, something we haven’t seen for decades,” the president said late Tuesday. “Chrysler is moving a major plant from Mexico to Michigan. Toyota and Mazda are opening up a plant in Alabama and we haven’t seen this in a long time. It’s all coming back. Very soon auto plants will be opening up all over our country.”
International automakers, in fact, have invested $75 billion in the United States over the past 20 years and now operate plants in 14 states and r&d facilities in 16 states, according to the Association of Global Automakers. A new Volvo plant is scheduled to open in South Carolina this fall and Mercedes-Benz will soon follow with van assembly in that state. Planning for both began before Trump was elected.
The auto industry invested $46 billion in U.S. factories and facilities between 2010 and 2014, according to the Alliance of Automobile Manufacturers, which represents a dozen domestic and foreign-owned automakers in the U.S.
The Center for Automotive Research in Ann Arbor, Mich., says automakers have invested $87.6 billion for plants and equipment in the U.S. from 2009-17.
Site decisions and expansions -- including several early last year as Trump took office -- are made for a variety of reasons, including sales demand, logistics, availability of skilled workers, state and local tax incentives, and energy costs. But industry executives acknowledge new investments and relocation of some assembly lines from Mexico have also been stimulated by the promise of tax cuts and an effort to forestall Trump threats of higher import tariffs on autos and auto parts.
Fiat Chrysler Automobiles recently announced it will transfer production of its next-generation heavy-duty pickups to Michigan from a plant in Mexico, a shift that reduces the risk that those trucks would be hit with a 25 percent tariff if NAFTA unravels. But the move is only for production of that particular line of pickups, not the entire plant, as Trump suggested.
The new investments, including December’s Toyota-Mazda announcement of a $1.6 billion plant in Huntsville, Ala., are “all news Americans are totally unaccustomed to hearing. For many years, companies and jobs were only leaving us, but now they are roaring back,” Trump said. “They want to be in the United States of America.”
While employment in the U.S. auto and auto parts industries has rebounded since the 2008-09 downturn, job growth has largely leveled off in recent years, according to U.S. data.
Trump has put pressure on the auto industry by threatening to scuttle the North American Free Trade Agreement because of the imbalance of trade with Mexico and Canada. In the address to the nation, Trump said “the era of economic surrender is totally over. From now on, we expect trading relationships to be fair and reciprocal.”
The sixth round of NAFTA renegotiations concluded in Montreal on Monday, with many differences still unresolved.
“We will work to fix bad trade deals and negotiate new ones” and rigorously enforce trade laws to protect workers, the president said.
He also said his decision to reopen a federal review of fuel economy and CO2 emission standards is part of an effort to get rid of regulatory burdens on industry that cost jobs.
Said Trump: “In Detroit, I halted a government mandate that crippled America’s great, beautiful auto workers, so that we can get Motor City revving its engines again.”