Daily Management Review

Ford Chairman Wants 'Certainty' In Trade Deal For Company To Plan And Invest


09/28/2018




Ford Chairman Wants 'Certainty' In Trade Deal For Company To Plan And Invest
Second largest US auto maker Ford wants some form of certainty to allow it to plan and make investments for the future. This was opined by the Ford Motor Co Executive Chairman Bill Ford on Thursday while taking about the ongoing trade war between the US and some of its former close trading partners – especially China and as the Trump administration is also in negotiations for a fresh trade deal with Canada.
 
Close contact with U.S. President Donald Trump’s trade negotiating team has been maintained by top executives of Ford, a company is celebrating the 100-year anniversary of a plant in Dearborn, Michigan, the home town of the automaker.
 
 “We just want to work with the administration on trade issues, tariff issues,” he told reporters at the company’s Rouge complex. This is the place where the highly popular and profitable F-150 full-size pickup trucks of Ford are built.
 
“Our business runs a lot better when we have certainty and we don’t have gyrations,” he added.
 
On Wednesday, Ford Chief Executive Jim Hackett had said that the company will have to see about $1 billion of its profits being lost in 2018 and in 2019 because of the Trump tariffs on the import of steel and aluminium.
 
Similar warnings of profits being hard hit have earlier been issued by more than one companies of the US auto industry because of the tariffs on steel and aluminum as well as those imposed on the US on Chinese products. In addition they have warned that there could be enhancement in vehicle prices and loss of jobs.
 
Tariffs of 25 percent on imported steel and 10 percent on imported aluminum from most countries was announced by Trump in March this year. The tariffs have forced a price hike by U.S. producers.
 
Trump had been very critical of the trade deficit that the US has with many countries and during the presidential campaign had claimed that this was the cause of the loss of manufacturing jobs in America. And ever since he took office, Trump has initiated a policy of imposing of import tariffs on a number of products which he claims is the remedy to reverse the trade deficit and to bring manufacturing jobs back into the country. he has been especially tough with China with three rounds of tariffs, the latest one being implemented last Monday and is worth $200 billion of Chinese products.
 
The US auto industry is concerned about a new set of tariffs being imposed by Trump. A “Section 232” national security investigation was ordered by Trump on May 23 this year which was mandated to investigate the possibility of imposing a fresh tariff of 25 percent on vehicle and auto parts imported in to the country from trading partners such as the European Union and some other trading partners.
 
The trade war and the regimen of tariffs forced Ford to downgrade its full-year earnings forecast in July and the company blamed the downgrade to lowering sale and slow business growth in Europe.
 
Bill Ford declined to specify what the company wanted in any trade deals, calling the talks “very fluid.”
 
(Source:www.ETAuto.com)






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