The auto industry is juggling a range of policy priorities in Washington, from tariffs to tailpipe emissions. But one item remains firm atop President Donald Trump’s agenda for the industry: more jobs for Rust Belt states that helped elect him.
Mr. Trump made clear at a White House meeting Friday with top auto-industry executives that he wasn’t done prodding them on jobs—including foreign manufacturers. During a televised portion of the meeting, Mr. Trump told the executives he wants to see “manufacturing of millions of more cars within the U.S.—for Michigan, for Ohio, for Pennsylvania.”
Mr. Trump’s pressure on car companies could mount as midterm elections draw closer, especially because the auto sector has been a central focus in his effort to generate American factory jobs.
Last year, as Mr. Trump urged auto makers to shift manufacturing to the U.S., some committed to fresh U.S. investments collectively worth billions of dollars and thousands of jobs. But Detroit’s car companies are more focused on the future, as U.S. sales have stalled after a multiyear expansion. General Motors Co., and Ford Motor Co. have unused U.S. factory space and are steering more capital toward advanced technology such as driverless cars.
Mr. Trump lately has been putting more pressure on foreign auto makers. During Friday’s session, he proposed a 20% tariff on imported autos, people briefed on the session said. He also raised the prospect of subjecting imported vehicles to Obama-era emissions standards while domestic vehicles would get more lax standards, the people said.
The proposal rattled executives sitting around the table from European and Asian auto makers, including Germany’s Volkswagen AG, BMW AG, Daimler AG and Japan’s Toyota Motor Corp. and Nissan Motor Co., according to people familiar with the matter. The hourlong session had been billed as a discussion of emissions regulations but was dominated by trade talk, the people said.
“It was a reminder that his priority is manufacturing and jobs,” said one person briefed on the meeting. “More job wins will continue to be the theme.”
Mr. Trump is targeting foreign auto makers at a time when much of the growth in U.S. vehicle production is already being fueled by relatively new factories built by Japanese and European car companies. In the past decade, Toyota, Nissan, Volkswagen, BMW, Geely Holding Group Co.‘s Volvo Cars and others have opened or significantly expanded U.S. plants, or outlined plans to do so.
European auto makers are on pace to make about 1 million vehicles in the U.S. this year, said Warren Browne, a consultant and former GM executive. “If the objective is to get BMW and Mercedes to make more cars in the U.S., [German Chancellor Angela] Merkel could say to Trump ‘Hey, we already make a million vehicles in your country.’”
In the first quarter of 2018, foreign auto makers were expected to have roughly matched American auto makers in U.S. production for the first time, according to WardsAuto.com.
In January, Fiat Chrysler Automobiles NV said it would relocate production of some trucks to a Detroit-area factory from a plant in Mexico, creating about 2,500 jobs.
During introductions at the meeting with auto executives, Mr. Trump interrupted to call out FCA Chief Executive Sergio Marchionne for “leaving Mexico, going to Michigan,” even though FCA will continue to operate three plants south of the border.
“He’s my favorite man in the room," Mr. Trump said.
