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Auto industry sees opportunity in Trump’s Washington

Nov 19, 2016

Business leaders are coming to terms with the brave new Trumpworld and the hometown automakers think they may have a new ally in the White House.

Ford Motor CEO Mark Fields says the automaker’s brass is in “constant communication” with President-elect Donald Trump’s transition team.

Credit Lester Graham / Michigan Radio

I’ll bet they are – and they’re not alone.

Not since President Barack Obama doubled down on his predecessor’s rescue of the Detroit auto industry has it been so important for this town’s automakers to stay close to the president-elect.

Trump’s promise to cut corporate taxes, to enforce penalties in trade agreements, and to expose currency manipulation is music to auto industry ears. For the first time in more than a generation, a president-elect is voicing attention to the kind of issues that can affect the industry’s competitive posture.

In Trump, the automakers and the United Auto Workers have a would-be champion for American manufacturing and jobs whose advocacy looks to be very different from that of Obama.

The Democratic incumbent’s willingness to execute a taxpayer-funded rescue of this town’s industry is offset by a record of politicized rule-making unmoored from technical and market reality.

Didn’t matter that fuel prices affected consumer demand in ways ideologues did not anticipate. Didn’t matter that sales of trucks and SUVs - not small cars - showed enduring appeal with the buying public. Didn’t matter whether technology could - or could not - satisfy those preferences, including new federal fuel economy rules the industry couldn’t fight in the wake of its bailouts.

The industry is already seeing signals the Trump administration is likely to be more sympathetic to market-based business considerations.

Trump is said to be keenly aware of industry concerns about alleged currency manipulation, chiefly by Asian rivals. He appears willing, like President Ronald Reagan, to enforce penalties for trade violations. His business-y bent means he leans toward using data - not politics - to set federal fuel-economy rules.  

Imagine that.

It’s hard to overstate the importance a regulatory shift like that would mean for the auto industry. For way too many years, partisan politics - usually of the left-of-center variety - routinely fueled Washington’s automotive policy-making. That includes tough fuel-economy regs from the left and the 2009 bailouts generally opposed by congressional Republicans.

Seven years after the bankruptcies of General Motors and Chrysler essentially saved Detroit from itself, Team Obama’s automotive regulatory regime is imperiled. Not because it will be entirely dismantled, because it won’t. But things are poised for change.

No wonder there’s angst among the environmental left and its allies in tech-driven Silicon Valley. Their intertwined worldview shaped the Obama administration’s regulatory direction - and its willingness to achieve preferred political ends - whatever the cost in jobs, to shareholders, or in common sense.

The industry is already seeing signals the Trump administration is likely to be more sympathetic to market-based business considerations. It’s less interested in using a politically correct worldview to shape government regulation so it can dictate the shape of product portfolios, long-term capital investment and what the public drives.

All of this spells opportunity. Ford knows it; General Motors Co. knows it; and Fiat Chrysler Automobiles NV knows it. So does the UAW, whose leadership officially backed Hillary Clinton - even if a fairly decent chunk of its membership did not.

That’s the makings of some change around here.