Archive for the ‘Trade’ Category

Volvo Expecting to Slow Ramp-Up of Charleston Plant Due to Trump Tariffs

Hiring to slow; impact could be long-term if some production shifts to China.

by on Nov.29, 2018

Volvo President & CEO Hakan Samuelsson said the tariffs implemented by the Trump administration are forcing a production slow down at its new Charleston, S.C. plant.

Volvo expects to slow the pace of expansion at its new factory near Charleston, South Carolina, due to the Trump trade war with China.

The move could impact how quickly the automaker expands production at the $1.1 billion plant, as well as the pace at which it brings on new workers. The workforce was expected to nearly triple, to around 4,000, by early in the coming decade with the addition of a second model at the plant. But some production now could be shifted to China, potentially having a long-term impact on plans for the factory.

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Volvo issued an official statement Thursday noting, “trade issues may impact the pace of the expansion.” But in conversations with reporters at the Los Angeles Auto Show on Wednesday, Volvo’s global CEO Håkan Samuelsson took things further, indicating the production ramp-up will slow down. (more…)

New NAFTA Faces Tough Road to Approval in Congress

Dems want tougher rules on Mexico, Reps want LGBT protections out.

by on Nov.19, 2018

President Donald Trump's success to NAFTA is facing serious trouble with Democrats and Republicans and may not get passed in its current form.

The new trade agreement with Canada and Mexico that President Donald Trump hailed as a major breakthrough back in August appears headed for serious trouble.

Forty Congressional Republicans have stated they will not vote for the agreement because it includes protections for the LGBT community, according to Politico. The protection for the LGBT community was included in the proposed tentative NAFTA 2.0 at the insistence of negotiators from Canada.

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The Republicans are the majority party in the U.S. House of Representatives, but campaign means the LGBT section means that the Trump administration cannot pass NAFTA 2.0 without Democratic votes. (more…)

EU Trade Chief Warns Trump Administration to Back Off Tariff Threat

Malmstrom comes to D.C. with a list of tariff targets.

by on Nov.15, 2018

Cecilia Malmstrom, the EU's top trade official, warned that if the Trump administration implemented auto tariffs on the EU, the union would respond in kind.

If President Donald Trump makes good on a threat to impose a 25% tariff on cars and trucks imported into the United States from Europe, the European Union is prepared to implement a new policy of its own: an eye for an eye.

Cecilia Malmstrom, the top trade official for the European Union, met with U.S. Trade Representative Robert Lighthizer to talk about trade issues. After the meeting, she warned the EU would implement tariffs of equal size and strength on U.S. goods if Trump made good on his threatened auto tariffs.

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“It would be a rebalancing list covering a lot of different sectors,” Malmstrom said. “That would be ready if we thought those measures would hit us. We hope not.”  (more…)

Automakers on Edge Over Possibility of New Tariffs

Commerce Dept. findings key to Trump administration's plans.

by on Nov.14, 2018

Commerce Secretary Wilbur Ross is leading the Section 232 investigation into whether or not imported automobiles and parts represent a threat to the United States.

While the U.S. midterm elections have passed, carmakers are waiting on a final decision from the Trump administration on the Section 232 investigation. Section 232 of the Trade Expansion Act of 1962 allows the White House to use national security grounds to impose tariffs on vehicles and auto parts imported into the U.S.

The industry’s lobbyists have said they were expecting the U.S. Department of Commerce, which is responsible for the investigation, to issue its ruling soon, perhaps this week well ahead of the February deadline fixed by the statute. The general assumption is the report will offer Trump a chance to impose new tariffs on autos and auto parts made in Europe and Asia.

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The 232 query has become a major issue for the Japanese government of Shinzo Abe, which has spent weeks trying to defuse the administration’s threat to impose tariffs that could have a major impact on the Japanese auto industry. (more…)

Volvo’s Care Subscription Program Key to Growth Plans

VCNA chief acknowledges reliability concerns but says problems, warranty costs, are tumbling.

by on Nov.08, 2018

Volvo Cars North America CEO Anders Gustafsson with images of some of the first workers at the automaker's new Charleston plant.

U.S. new vehicle sales are on course to post their second consecutive decline as 2018 draws to a close, but you’d have a hard time telling that if you were just looking at Volvo’s numbers.

The Swedish automaker has posted a 27% jump in demand through the end of October and, with more products ready to land in U.S. showrooms, Volvo Cars USA CEO Anders Gustafsson said Thursday he is optimistic the company can keep its momentum growing.

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Several factors could give meaning to his forecast, including not just the launch of the new Volvo S60, but the start of production at the Chinese-owned automaker’s first U.S. assembly plant in Charleston, South Carolina. Then there’s Care by Volvo, the subscription program the carmaker launched late last year.

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Toyota Earnings Soar on Global Sales Surge

Automaker lifts full-year forecast.

by on Nov.06, 2018

Strong demand for Lexus, especially in the Chinese market, helped Toyota deliver strong earnings.

Toyota Motor Corp. reported a 28% increase in its net profit for the July-September quarter, earnings buoyed by strong demand in key global markets, including the Americas, Asia and Europe.

The Japanese giant also advised that it expects to see earnings push past earlier forecasts for the full year, in part driven by unexpectedly strong demand in China. Sales of the Lexus brand, have been booming there, despite a slowdown in the overall Chinese market.

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Sales gains were only one of the factors that propped up Toyota’s bottom line, said Senior Managing Masayoshi Shirayanagi. Referring to aggressive cost-cutting efforts, he said, “We are steadily making progress toward achieving our challenge-level target.”

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Tesla Expects to Spend as Much as $6B in Next Two Years

Money to be used for product development, China plant.

by on Nov.02, 2018

Tesla's move to build a new plan in China will include up to $3 billion to for a new plant and other expenditures.

Already plagued by rumors of needing to raise additional money, Tesla officials expect to spend between $5 billion and $6 billion in the next two years to expand production.

The company, which revealed the plan in its quarter filing with the Securities and Exchange Commission, is making big moves with the money.

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Tesla will spend between $2.5 billion and $3 billion in capital expenditures readying the business for increased Model 3 production, development on its next vehicle, the Model Y, the second-generation Roadster and other projects, according to the filing. (more…)

GM Handily Beats Earnings Forecast, Buoyed by Truck Sales

Shares soar in pre-bell trading.

by on Oct.31, 2018

GM's Renaissance Center headquarters in Detroit.

General Motors delivered a positive surprise to analysts and investors on Wednesday morning, delivering significantly stronger earnings than had been forecast, buoyed by surging demand for its light truck line-up, including the completely redesigned Chevrolet Silverado pickup.

The announcement stands in sharp contrast to rival Ford Motor Co. which, last week, reported a significant decline in third-quarter income, despite strong demand for models like its F-150.

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GM said it earned a net of $2.53 billion during the July-to-September quarter, or $1.75 a share. A year ago, it lost $2.98 billion, or $2.03 a share, though that figure largely reflected the cost of completing the sale of its European-based Opel subsidiary to France’s PSA Group.

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With Saudi Crisis, Threat to Automakers Escalates

Middle East instability impacts U.S. economy.

by on Oct.24, 2018

Joe Hinrichs, Ford president, said that the volatility of the Middle East, specifically Saudi Arabia, impacts automakers.

Car makers from around the world will pause briefly during the next couple of weeks to unveil their financial statements for the July-September quarter, which, on balance, was relatively calm despite rising pressure on their margins from Chinese and American tariffs.

However, VW CEO Herbert Diess did warn the stress on manufacturers is growing steadily. German carmakers only have a 50% chance of surviving reforms required to shift production to electric cars and to tackle new geopolitical threats push some carmakers out of business, he said.

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Meanwhile, the pressure from tariffs is liable to get more intense in the future. The Trump administration is continuing to threaten tariff on auto exported from Japan. Meanwhile, the unsettling news cycle from the Middle East that began with the kidnapping and murder of Jamal Khashoggi continues to unfold with uncertain consequences. (more…)

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…)