DETROIT — In one of his final acts as vice president, Joe Biden stopped in Detroit last week for the second press day of the North American International Auto Show. He admired a bright blue and white Chevrolet Corvette Grand Sport and said he intended to buy a Corvette Stingray. Then he made his way to the Chevy Bolt — a symbol of the Obama administration’s efforts to inspire innovation in clean energy, made at General Motors Orion Assembly, 30 miles north of Detroit.
Biden’s swan song lap was one of the more normal moments at the show — a presidential administration and its relationship to the car industry, on display for the cameras. The rest of the week felt very different. It was an exercise in jittery patriotism, put on by an industry already rocked by the incoming president, Donald Trump.
Trump’s shadow loomed over the show, which is now open to the Michigan public. On Monday, GM announced it would invest $1 billion in its US manufacturing operations. That investment is not entirely “news” — it falls under GM’s 2015 announcement that it would invest $5.4 billion in its American factories in a three-year time span. But it seemed directed at Trump, who immediately celebrated it on Twitter.
In another sign of a Trump effect, the show’s product news, and even its showcase of self-driving vehicles, seemed to pale in comparison to automakers’ quest to show their ultra-American sides. Domestic companies, such as Ford and GM, and those based abroad, such as Toyota, were all hyper-focused on their American business.
It was a striking departure in focus from other recent shows, where new business models were geared toward the booming Chinese market.
The auto show press previews, held in the second week of January, have long served as a symbol for what’s happening in the American economy at the top of the year. The event has often been draped in politics. Members of Congress tour it, and occasionally a president or someone from his administration drops by. In 2009, some analysts predicted the end of the auto industry during the show, and a dark mood was cast across the convention center as a federal bailout loomed large.
As the car companies rebounded during the recovery, and car sales began to break records, the past few years brought a more upbeat approach and focus on fending off the rise of tech companies in the car space.
This year, Trump’s Twitter criticisms seemed to send the companies into a tailspin. The show floor at Cobo Center, which can be buzzy on a press day, was subdued. Instead of trying to create product reveals to appeal to millennials, automakers seemed more keen on trying to play to the tastes of the Trump administration. They appeared to be bracing for the tweet that never came.
Automakers draped themselves in the flag
Even foreign-based carmakers tried to stress their American-ness. At Toyota’s press conference, a large “Made in Kentucky” sticker was pasted on the rear window and “Made in U.S.A.” on one side of the new Camry. Toyota brought its factory-team NASCAR drivers Denny Hamlin and Kyle Busch on stage to drive home that point, and Toyota played up the fact that it is the company that builds most cars in America.
In a press conference, Volkswagen also stressed the fact that it builds SUVs in Tennessee. Honda honed in on its years of doing businesses in America and its intentions to build a new hybrid here, and it put a map of the United States on display.
The Korean company Kia used red, blue, and a light silver as the hue on its new sports sedan, the Stinger. Tuesday, Kia and Hyundai also announced plans to increase investment in American factories.
When the topic of Trump came up, automakers did their best to carefully choose their words about their thoughts on the incoming administration. “I need clarity. I think we all need clarity,” Fiat Chair Marchionne said to reporters when asked about Trump. “And we are not the only ones that need clarity.”
Automakers stressed that decisions about short- and long-term manufacturing plans could be altered in the coming months, if Trump follows through with his threats to impose new tariffs or finds way to cut into planned increases for better emissions standards. Some said they were optimistic about Trump’s talk of pro-business tax policies.
Almost every automaker announced a domestic investment
The big splashes were the timing of announcements by Ford, Fiat Chrysler, and GM on plans for manufacturing initiatives. Fiat Chrysler said it would spend $1 billion on retooling manufacturing plants in the Midwest. Ford said it would invest $700 million in a Michigan plant to build new electrified vehicles on the same day it would cancel plans for a $1.6 billion factory in Mexico, and later announced it would build a Bronco and Ranger in another Michigan factory and move the Focus to an existing plant in Mexico.
But some labor specialists believe that automakers were re-spinning news for the sake of appearances. “Ford didn’t really change their plans. They moved the production of the slow-selling Focus from Michigan to an existing plant in Mexico and in its place they are going to put the Ford Ranger and Bronco, which means its workers are making a product that’s likely to sell better at higher profits,” said Art Wheaton, director of the Worker Institute of Cornell, in an interview.
“What Ford didn’t say is that the groundwork for this move was laid in negotiations with the UAW two years ago. What hadn’t been determined was what car would be built.”
The fuel-efficient economy Focus is not Ford’s best seller. “Workers make more when they build higher-volume, more expensive SUVs than cars. They tend to have less shutdowns,” Wheaton said. Sales of hybrids and small cars lag behind SUVs and trucks, which, in an era of low gas prices, tend to be cash cows for car companies.
In recent years, carmakers have moved manufacturing of cars to Mexico partly for reduced labor costs, but also to avoid paying tariffs. Ford in particular ships many of its cars to Europe. Despite drawing Trump’s ire, GM and Toyota said they will not shift plans to build cars in Mexico. Investments in GM, FCA, and Ford plants are the result of a profitable few years in the car industry.
And despite Trump’s attempts to take credit for the automaker’s decisions, the credit for US based plants may be due to United Auto Workers Association.
The UAW negotiates and advocates with GM, Ford, and FCA, on behalf of factory workers. Plans to build cars in the US and to protect jobs were included in the last round of negotiations that took place two years ago. Building small cars in Mexico wasn’t the focus of the last round of UAW negotiations reached in the fall of 2015. The bigger issue was for employees to move away from the two-tier pay system, which caused friction among workers, and goes against a historical union premise: equal work for equal pay.
Still, Trump was happy to take credit for the big investment announcements. Perhaps fittingly, the show will stay open to the public until Sunday, his first weekend in the White House.