Fiat Chrysler may end Mexico output if Trump tariff too high: CEO

Mon Jan 9, 2017 12:38pm EST
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By Nick Carey

DETROIT (Reuters) - Fiat Chrysler Automobiles FCHA.MI FCAU.N Chief Executive Sergio Marchionne said on Monday that if tariffs set in a Trump administration on vehicles made in Mexico and imported to the United States are too high, the company may end Mexican production.

“It's possible, if the economic terms imposed by the U.S. administration on anything that comes into the United States that, if they’re sufficiently large that it would make the production of anything in Mexico uneconomical," said Marchionne. "We would have to withdraw. It is quite possible.”

Marchionne, as have most of his counterpart automotive CEOs, said he wants to wait to see what is proposed. He also said that FCA is prepared to respond to whatever policies are set in a Trump administration.

“Let’s find out what happens as a result of President-elect Trump coming in and how he views imports," said Marchionne.

Marchionne said that the entire Mexican automotive industry could be imperiled.

"The reality is the Mexican automotive industry has now for a number of years now been tooled-up to try and deal with the U.S. market. If the U.S. market were not to be there, the reasons for its existence are on the line,” Marchionne said.

The United States is the second-largest automobile market, behind China.

Mexico accounts for a fifth of all vehicle production in North America and has attracted more than $24 billion in auto investment since 2010, according to the Ann Arbor-based Center for Automotive Research.   Continued...

Fiat Chrysler Automobiles CEO Sergio Marchionne listens during the North American International Auto Show in Detroit, Michigan, U.S., January 9, 2017.  REUTERS/Rebecca Cook - RTX2Y609