In another tweet targeting a U.S. company, President-elect Donald Trump is threatening to slap a tax on General Motors for importing compact cars to the U.S. from Mexico.
But GM makes the vast majority of its Chevrolet Cruzes at a sprawling complex in Lordstown, Ohio, east of Cleveland, and said it only imports a small number of hatchback models.
Trump tweeted early Tuesday that GM is sending Mexican-made Cruzes to the U.S. tax-free. He told GM to make the cars in the U.S. “or pay big border tax!”
GM only sold about 4,500 of the hatchback version of the Cruze made in its factory in Ramos Arizpe, Mexico, in the U.S. last year, spokesman Patrick Morrissey said. The company sold about 172,000 Cruzes through November. The hatchback, which went on sale in the U.S. last fall, is built in Mexico primarily for global distribution, Morrissey said.
Cruze hatchback production amounts to less than a day of output at the Lordstown plant, said Glenn Johnson, president of a United Auto Workers union local at the factory. The union, he said, is not protesting the move to build the hatch in Mexico.
“It makes for news, that’s all,” Johnson said of Trump’s tweet. The Lordstown factory, he said, is not equipped to build the hatch.
GM shares (ticker: GM) fell by in premarket trading after the tweet was posted but finished the day higher by 31 cents at $35.15. GM is one of the biggest employers in Tarrant County, with more than 8,000 workers at its assembly plant in Arlington and GM Financial operations in Fort Worth and Arlington.
The tweet was the latest threat from Trump to tax companies that move production to Mexico and ship products back to the U.S. under the North American Free Trade Agreement. Nearly every automaker produces small cars in Mexico to take advantage of lower labor costs.
GM’s assembly plant in Arlington, which builds large sport utility vehicles including the Chevrolet Tahoe and Cadillac Escalade, has flourished in recent years. The plant, which employs more than 4,300 workers, is running three shifts to meet demand for the SUVs, which have become even more popular as gas prices have fallen. In 2015, GM announced another $1.4 billion expansion in Arlington, which will add new body and paint shops, and expanded production, by next year. GM has said it expects to add 600 more jobs.
Trump has targeted another big Tarrant County employer with his tweets, attacking Lockheed Martin over the cost of the F-35 fighter jet. Other tweets have targeted Amazon.com and Boeing.
Last year, Trump touted a deal to keep 800 jobs at the Carrier furnace factory in Indianapolis from going to Mexico. He has promised to lower corporate tax rates to preserve factory jobs in the United States, while threatening harsh penalties for companies that produce goods overseas to save on labor costs. On Twitter, Trump warned that he will impose a 35 percent tariff on the goods imported by companies that outsource production.
In November, GM said it would lay off about 1,250 workers at the Lordstown plant because of sagging demand for cars as U.S. buyers take advantage of low gasoline prices to buy trucks and SUVs. The workers on the third shift at Lordstown will go on indefinite layoff starting Jan. 23, although some may move to other GM factories.
Sales of the Cruze were down more than 18 percent through November.
Shifting demand from cars to trucks and SUVs is forcing General Motors to lay off more than 2,000 workers. Last month, 61.5 percent of U.S. new vehicle sales were trucks and SUVs, according to Autodata Corp., and analysts say there’s no sign that will change anytime soon.
This report includes material from Star-Telegram archives.