Two auto makers announced spending of $4.1-billion (U.S.) in their U.S. operations, more than double in one day than what Canada has won in the past five months, underscoring the difficulty this country will have in convincing auto makers to build new plants in Canada.
Hyundai Motor Co. said it will invest $3.1-billion at U.S. operations in the next five years and is considering building another assembly plant, while General Motors Co. said it will spend $1-billion in moves that will retain or create 1,500 jobs.
Although both companies insisted the initiatives were well along in the planning stage, they come days before the inauguration of Donald Trump, who has been using the bully pulpit of the U.S. presidency to threaten auto makers that build vehicles in Mexico and then ship them to the U.S. market.
Mr. Trump has threatened – via Twitter, campaign speeches and interviews – GM, BMW AG, Ford Motor Co. and Toyota Motor Corp.
Hyundai has not been singled out, but its Kia Motors unit began making vehicles at a plant in Mexico last year and Hyundai is scheduled to begin production of its own vehicles there later this year.
Mr. Trump has so far not threatened to slap what he calls “big border taxes” on Canadian auto exports, but his officials have warned that no country is immune if U.S. jobs are in danger from production shifts.
His focus on creating U.S. jobs and the potential of Canada popping up in his sights will reduce the likelihood that any auto maker would build a new, greenfield assembly plant in Canada, industry analysts said.
“The chances of Canada getting a greenfield [plant] without Trump was near zero, with Trump it’s less than zero,” said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. in Richmond Hill, Ont.
But the setting of automotive policy by a series of 140-character tweets has the potential to be less damaging to Canada, Mr. DesRosiers said, if it means Mr. Trump decides not to follow through on other threats, which include ripping up NAFTA and imposing a 35 per cent tax on vehicles imported into the United States from Mexico.
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