Marchionne Says Trump Presidency Could Affect FCA Production Plans
Protectionist Policies Could Have “Implications” on Manufacturing Strategy
Love him or hate him, Donald Trump has a knack for keeping himself in the headlines and defying the critics and cynics that initially predicted his campaign would flame out long ago. The prospect of a Trump administration is now a real possibility, and many companies that have significant exposure to overseas or south-of-the-border manufacturing are on standby to see how their manufacturing operations could be affected by the more protectionist policies advocated by the presumptive GOP presidential nominee. One such company that could be significantly affected by the cancellation or renegotiation of the North American Free Trade Agreement (NAFTA) is Fiat Chrysler Automobiles (FCA). According to a Bloomberg report, FCA CEO Sergio Marchionne said strongly protectionist trade policies would “have implications about how we manage our business going forward.”
All of the Detroit Three have significant manufacturing investments in Mexico and Canada. However, FCA is perhaps the most reliant on the U.S.’s southern and northern neighbors for product and components. FCA has seven facilities in Mexico split between Toluca and Saltillo. The Saltillo truck plant builds the high-dollar, high-margin Ram HD trucks, while the Saltillo engine plant builds all of the Hemi V-8 engines used extensively throughout FCA’s truck and SUV lineup. A second plant also builds the 3.6L Pentastar V-6, which is also built in Trenton, Michigan. Saltillo is also the sole source for the North American-spec Ram ProMaster van. The Brampton and Windsor assembly plants in Canada build the Chrysler 300, Dodge Charger, and Challenger cars and the Dodge Grand Caravan and Chrysler Pacifica minivans, respectively.