Case of the Killer Toyotas
China, Cuba, Russia, al Qaeda, Islamic State, the Toyota Motor Corp., North Korea, Hezbollah, the Islamic Revolutionary Guard Corps. Which one of the above doesn’t belong on a list of national security threats to the United States? A Wall Street Journal editorial writes that if you answered Toyota, you must not work for the Trump Administration, which declared last week that autos or auto parts pose a threat to U.S. national security unless they are “American-owned.” The proclamation’s “American-owned” language is a sour and illogical note that could lead to punishing tariffs or even controls on investment in the U.S. Toyota has 10 manufacturing plants across eight states, including Alabama, California, Indiana, Kentucky, Mississippi, Missouri, Tennessee, and West Virginia. Toyota also has a network of 1,500 auto dealers that employ 100,000 Americans, and directly or indirectly through its suppliers Toyota employs a total of 475,000 Americans. Mr. Trump’s trade strategy with China at least has the logic that it could lead to more trade opening and less mercantilism in Beijing. But his argument for auto tariffs, or restraints on auto imports and foreign investment, is pure protectionism that would help only a few American-owned firms. This is an argument for making America small again. Read more here.
Trump Declaration They're a Security Threat Stuns Japanese Automakers
According to Autoblog, Japan's automakers' lobby said on Tuesday it was dismayed by President Donald Trump's declaration that some imported vehicles and parts posed a threat to U.S. national security, as the industry braces for a possible rise in U.S. tariffs. "We are dismayed to hear a message suggesting that our long-time contributions of investment and employment in the United States are not welcomed," said Akio Toyoda, chairman of the Japan Automobile Manufacturers Association. "As chairman, I am deeply saddened by this decision," Toyoda, president of Toyota, said in a statement. Most of Japan's major automakers operate plants in the United States. The Japan Automobile Manufacturers Association notes that its automakers build about 4 million vehicles a year in North America, or 75 percent of what it sells here. Many are built for export, helping lessen the U.S. trade deficit Trump is concerned about. Read more here.
U.S., Japan Officials Meeting to Advance Trade Talks, Report Says
U.S. Trade Representative Robert Lighthizer will visit Japan on May 24 to meet Economy Minister Toshimitsu Motegi to accelerate trade talks ahead of a leaders' summit a few days later, two sources with direct knowledge of the plan said on Monday. According to Automotive News, after a late-April meeting between President Donald Trump and Prime Minister Shinzo Abe, Trump had said it was possible for the two allies to reach a new bilateral trade deal by the time he visits Tokyo in late May. Kenji Wakamiya, chairman of the lower house of parliament's foreign affairs committee, said he expected the United States would not be as tough on Japan as it had been on China, though adding it was not certain a deal could be reached this month. On Friday, Trump angered foreign automakers including Toyota Motor Corp. by declaring that some imported vehicles and parts posed a national security threat, while delaying a decision for as long as six months on whether to impose tariffs to allow more time for trade talks with the European Union and Japan. Read more here.
Ford Slashes 7,000 Jobs as Sweeping Disruption Hits Automakers
Ford Motor Co. plans to eliminate about 7,000 salaried jobs – about 10% of its global white-collar workforce – as pressures mount on automakers to keep pace with massive technological shifts amid signs global car demand has peaked. According to Bloomberg, eliminating the positions will save Ford about $600 million a year, Chief Executive Officer Jim Hackett wrote in a memo to employees Monday, seven months after the company informed employees of a salaried workforce “redesign.” The majority of the cuts will be completed by May 24 in North America, and by the end of August in markets including Europe, China and South America. Read more here.
Next Mitsubishi CEO Says U.S. Exit 'Probably' Not an Option
Mitsubishi's newly appointed CEO says the automaker's low-volume U.S business requires a rethink in line with the parent company's new "small but beautiful" strategy, but he added that pulling the plug on sales in the region is "probably" not an option. According to Automotive News, Takao Kato, who helped establish Mitsubishi's joint manufacturing plant with Chrysler in Illinois some three decades ago, conceded Mitsubishi's U.S. strategy is still a work in progress. "If you are a big-scale OEM, of course you will be able to secure a profit. But will that be appropriate for us too, at MMC?" Kato said in a Monday news conference, his first since being named CEO last week. "This is something we believe we should deliberate on going forward." Kato, 57, who currently leads Mitsubishi Motors' important Indonesia unit, will take the reins from Chairman and CEO Osamu Masuko pending approval at a June 21 shareholders' meeting. Read more here.
Webinar TODAY: Let Go and Let Google
Join Google's Senior Automotive Retail Strategist, Kelly McNearney, on Tuesday, May 21st at 2:00pm EDT as she demonstrates how to drive more dealership visits using Google machine learning. Kelly will discuss how dealers need to "let go" of traditional marketing and "let Google" use advanced algorithms, machine learning and data to bring their business into the digital age. To register, click here.
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