Archive for the ‘Trade’ Category

US-China Trade War May Cost BMW $600M Next Year

Automaker's SUV exports cut off due to tariffs.

by on Oct.15, 2018

An early version of the 2019 X5 rolls down the BMW assembly line in Spartanburg, SC. The plant isn't shipping utes to China and that could cost the company big.

BMW expects its earnings to drop by almost $600 million next year if the trade war between the U.S. and China remains frozen in place, the German automaker’s CFO Nicolas Peter said during an interview with Automobilwoche, one of Germany’s leading automotive magazines.

Tariffs between the United States and China have cut exports of sport-utility vehicles from its U.S. plant in Spartanburg, South Carolina, to China, resulting in a hit to earnings of just below 300 million euros, Peter said, according to an extract of an article.

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“If the tariffs remain in 2019, it could have a full-year impact of half a billion euros,” Peter added.  (more…)

Bill Ford Leads Exodus from Saudi Economic Event in Response to Alleged Murder of Journalist

Global business, political and media leaders demand answers in disappearance.

by on Oct.15, 2018

Ford Chairman Bill Ford is shown during a celebration of the 100th anniversary of the carmaker's River Rouge manufacturing complex.

Bill Ford, the chairman of Ford Motor Co., is leading an exodus of high-profile business leaders who have decided to pull out for an upcoming investor conference sponsored by Saudi Arabia.

The move comes amidst growing concerns about the fate of Saudi journalist Jamal Khashoggi, who reportedly entered the Saudi consultate in Istanbul, Turkey last week but failed to leave it, raising concerns he may have been murdered by hit men dispatched by Saudi leaders.

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Khashoggi was a regular contributor to a number of publications, including the Washington Post, and had been granted U.S residency. Reports have surfaced over the last several days indicating American intelligence officials may have had advance warning that Khashoggi faced threats from the Saudis. Turkish officials, meanwhile, claim to have evidence the journalist was murdered in the embassy, his remains subsequently being smuggled out.

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China Car Market Tumbles, Complicating Problems for U.S. Automakers

BMW plans to be first foreign maker to take control of Chinese joint venture.

by on Oct.12, 2018

President Donald Trump is engaged in a trade war with China, and automakers are beginning to pay the price.

After nearly two decades of double-digit growth, the Chinese car market is entering a tailspin, and that could be particularly problematic for American automakers caught up in the U.S.-China trade war.

But other foreign automakers could better weather the downturn, in part due to changing rules that have lowered import tariffs – except on American products – and will now allow foreign manufacturers to take control of joint ventures. BMW is set to become the first to take advantage of the relaxed rules, agreeing to spend $4.2 billion to up its stake in an ongoing alliance with Brilliance China Automotive Holdings.

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“The automotive industry has been a driver of China’s economic growth for years. Now it is pulling back,” Xu Haidong, the assistant secretary general of the China Association of Automobile Manufacturers, said during a Friday news briefing, responding to questions about the market’s third straight monthly decline. (more…)

Volvo Scrambles as Trump Tariffs Shatter Export Plans for New U.S. Plant

China market closed, “I need to find a substitute," says US CEO.

by on Oct.10, 2018

Volvo's new plant near Charleston, S.C., is churning out new S60s. It will add the XC90 in 2021.

Volvo’s plans for its first-ever American assembly plant have been thrown into turmoil as a result of Pres. Donald Trump’s trade war with China, something that will result in fewer auto exports from the South Carolina factory, potentially impacting hiring plans, the automaker’s U.S. CEO told bingdb.info.

Volvo initially planned to use the Charleston facility as its global source for the all-new S60 sedan, while also producing some of its popular XC90 crossovers. Fully half of the assembly plant’s production was earmarked for China and other overseas markets, noted Anders Gustafson. But the administration’s escalating trade war has resulted in China boosting tariffs on American-made vehicles and parts from 25% to 40%, even as it reduces duties on auto imports from other trade partners to 15%.

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“Now, we cannot export to China” because the S60 would be priced out of the market, Gustafson, the president and CEO of Volvo Car USA, said during an interview near Los Angeles, where the company was offering journalists a first drive of the S60. “In this segment, you can’t raise prices because of competitiveness.” (more…)

Unions Withhold Support for New NAFTA Touted by Trump

Leaders want to see how some provisions will be enforced.

by on Oct.03, 2018

UAW President Gary Jones wants to see how certain provisions of the new NAFTA are enforced before offering full-throated support of the deal.

One constituency, organized labor, is withholding its support to the revision to the North American Free Trade Agreement unveiled this week by President Donald Trump.

“For a quarter century NAFTA has been disastrous for working people in the U.S., Canada and Mexico and a gift to corporations offshoring good U.S. jobs,” the UAW, which supported Trump’s push to revamp NAFTA, said in a statement.

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“The true test of a new NAFTA agreement will be in whether it protects and enhances opportunities for the U.S. workforce and leads to higher wages and benefits for UAW members and manufacturing workers who have suffered for far too long,” Gary Jones, the UAW’s new president noted.  (more…)

Future of Alliance with Nissan/Renault the Big Question as Zetsche Prepares to End Role as Daimler CEO

Zetche and Nissan/Renault’s Ghosn insist there is more to come during Paris new conference.

by on Oct.03, 2018

Zetsche and Ghosn first met when the German exec was working at Freightliner and the Brazilian-born Ghosn worked for Michelin.

Since launching the first in a broad series of joint ventures nine years ago, Daimler AG and the Nissan/Renault/Mitsubishi Alliance have generated what they claim to be billions of dollars in “synergies” that have allowed them to expand their product lines and grow into new markets.

But in recent months, the future of that partnership has come under question. The last major new project was announced three years ago. And now, with Daimler Chief Executive Dieter Zetsche planning to relinquish the CEO title next year, that has raised new questions about whether his successor, Ola Kallenius, would keep the alliance going.

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“Without the chemistry between us, maybe this wouldn’t have happened,” said Zetsche, during a joint news conference with Nissan/Renault/Mitsubishi Alliance chief Carlos Ghosn. But considering the results the partnership has generated, “I don’t see from my perspective why the momentum in this relationship should change.”

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NAFTA Gone! United States-Mexico-Canada Agreement Takes Over

New deal supplants old one; changes may not help auto industry.

by on Oct.01, 2018

President Donald Trump says the new United States-Mexico-Canada Agreement means plenty of new jobs for U.S. workers.

This story has been updated with new information.

Talking and hand-wringing has shifted to hand shakes and back slapping as renegotiation of the long-standing trade agreement between the United States, Canada and Mexico is finally complete — with significant changes for the auto industry.

The new United States-Mexico-Canada Agreement (USMCA) replaces the $1.2 trillion North American Free Trade Agreement and with it, comes many new jobs, according to its main driver, President Donald Trump. However, the auto industry is taking a wait-and-see attitude.

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“These measures will support many – hundreds of thousands – American jobs,” Trump said in remarks at the White House. “It means far more American jobs, and these are high-quality jobs.”  (more…)

Brexit Woes Starting to Impact Automakers

Companies warning of job losses in the UK.

by on Oct.01, 2018

Toyota Plant Director Marvin Cooke told the BBC that the plant could close if a "no-plan" Brexit takes place. (Photo credit: BBC)

With the United States finally resolving the trade agreement with Mexico and Canada, the Brexit saga automatically elevates to the level of grave importance for automakers.

Manufacturers have warned for months that Brexit, Great Britain’s withdrawal from the European Union approved by UK voters two years ago, holds devastating consequences from automakers. Carmakers with factories in Britain are already paying more for parts because of the devaluation of the British pound.

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Toyota Motor Corp. is now threatening manufacturing jobs in the UK. The company could be forced to halt production at its Midlands U.K. factory in the event Britain leaves the European Union without a deal, the plant’s managing director, Marvin Cooke, told the BBC over the weekend. (more…)

Steel Workers Ready to Strike

Despite "lavish" profits, company's pushing workers for cuts.

by on Sep.27, 2018

United Steel Workers union members rally in Indiana, looking to keep wages and benefits from being cut.

A dispute over wages has left the United Steel Workers union at odds with two key makers of steel that control a large piece of the steel-making capacity in the United States.

Both United States Steel and Arcelor Mittal have been major beneficiaries of the tariffs imposed by the Trump administration. “Steel is going phenomenally well,” Trump boasted during a press conference this week.

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However, that hasn’t benefitted everyone. Ford CEO Jim Hackett said in an interview that rising prices, resulting from the tariffs, are likely to cost Ford Motor Co $1 billion this year and next. (more…)

In Rare Rebuke, Senate Republicans Blast Trump Over Tariffs

President rejects meeting with PM Trudeau while warning of attack on Canadian autos.

by on Sep.27, 2018

President Donald Trump has been rebuked by Republican lawmakers and automakers for enacting $200 billion in tariffs against China.

President Donald Trump and his increasingly aggressive trade measures are coming under fire from unusual quarters: the GOP side of the Senate and normally Republican-friendly automakers.

The backlash comes just days after the Trump Administration enacted $200 billion in new tariffs on Chinese imports and in the wake of the president’s decision not to meet with Canadian Prime Minister Justin Trudeau. Instead, Trump is warning of new barriers to Canadian-made autos and auto parts that could create nightmares for an auto industry dependent upon a continent-wide production network.

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The White House is also readying possible tariffs on European-made automobiles, something that could draw the EU into what is rapidly becoming a global trade war. And the latest threats have finally triggered a pushback from Republicans who have, until now, been loath to seem at odds with the former businessman now leading the country. (more…)