Borg Warner CEO Is One Of Few To Ask Trump To Leave Strict CAFE Standards Alone
President Trump has proven eager to meet with tech company leaders, top manufacturing gurus, and automakers, including the Detroit Three. However, these companies count on a vast network of suppliers to make their products a reality. Thus far, the administration hasn’t had time to communicate with automakers’ substantial support network.
This week, the Detroit Economic Club hosted a mobility meeting, and had an opportunity to hear from top brass at three major automotive suppliers. They feel in the dark, and concerned at this point, and each offered their perspective.
David Dauch, chairman and CEO of American Axle & Manufacturing, shared (when questioned about his concerns):
“It’s the whole tax-reform strategy… the trade-reform strategy, an energy policy that’s good for this country, an environmental policy that’s good for this country, a labor environment that’s competitive for us.”
“Our policy is that we like manufacturing our products where the product is being consumed … whether that’s here in the U.S., whether that’s in Mexico, whether that’s in China or Europe.”
Dauch said that worries go well beyond changes in trade and the renegotiation of NAFTA. Trump’s “America First” stance has no wiggle room or parameters, and will make many suppliers’ choices difficult.
CEO of Lear Corp., Matt Simoncini agreed about the missing details. Nothing has a definition when it comes to “imports,” and companies can’t attempt to follow specifics, because there are no specifics. There is no prior warning of significant changes, so companies can’t plan ahead. He explained:
“What we need is clarity of policy and time to react. What we have right now is a bunch of vague comments, vague policies, a tax program where we’re not really sure how it’s going to impact us.”
It can be compared to the recent travel ban, and the building of a border wall between the U.S. and Mexico. Simoncini noted that infrastructure development, like that of the “Trump’s wall,” will trickle down to suppliers. These groups, and everyone else involved, need time to plan ahead, and it botches up competition do to “competitive disadvantage” related to lead time and preparation. He said:
“Infrastructure spending typically drives demand for light vehicles and trucks.”
James Verrier, president and CEO of Borg Warner, was the only one that complimented Trump on his alacrity to take the time to speak with business leaders. Perhaps Verrier is in the Elon Musk camp, though not agreeing with Trump, realizing the potential positives from having open avenues of communication. Verrier’s words to Trump had a stronger tone than that of the others. He pleaded:
“Do not slow down the pace on CAFE standards. We’ve come a long way as an industry and we need to keep going forward. Don’t go backwards and don’t slow down.”
Source: The Detroit News