Ford CEO Optimistic About Working with Trump Admin Amid Tariffs

As the automotive industry braces for potential fallout from President-elect Donald Trump's proposed tariffs, Ford Motor Company CEO Jim Hackett remains optimistic about the future. In an interview with Bloomberg, Hackett expressed his eagerness to work with the incoming administration to address trade disputes and find solutions that benefit both the industry and the American consumer.

Hackett acknowledged the challenges posed by the new tariffs, particularly the 25% levy on goods from Mexico and Canada, which are critical trade routes for the auto industry's global supply chain. However, he emphasized the importance of resolving these issues quickly to minimize the impact on consumers and the industry as a whole.

"We’re committed to creating long-term value by building a competitive and profitable business," Hackett said. "With pricing and margin compression, we’ve made the decision to adjust our product and technology roadmap and industrial footprint to meet our goal of reaching positive EBIT within the first 12 months of launch for all new models."

Ford has been actively gaming out various scenarios to determine the impact of tariffs on their business and how they would adjust pricing and production strategies accordingly. The company has also been in communication with the Trump administration, seeking clarity on the implementation of the new tariffs under the existing trade agreement between the US, Canada, and Mexico.

Hackett emphasized the importance of maintaining pricing discipline in the face of increased costs, stating that the company would continue to make necessary decisions to remain competitive. However, he also acknowledged the potential for some costs to be passed along to consumers if the tariffs remain in place for an extended period.

The auto industry's outsized role in US-Mexico trade was on full display as Mexico President Claudia Sheinbaum invoked GM, Ford, and Stellantis by name, suggesting that the country could raise tariffs of its own in response to new levies by Trump. Sheinbaum warned that one tariff would be followed by another in response, potentially putting common companies at risk.

GM has one of its four North American plants making large pickup trucks in Silao, Mexico, with much of its production coming to the US. The Detroit-based carmaker also imports the Chevrolet Equinox EV from a plant in Ramos Arizpe, which also builds the Blazer EV. Additional levies could also pose a risk to Stellantis' push to shift its manufacturing footprint to lower-cost countries, including Mexico.

Contingency plans are being considered by most investors, who assume that Trump ultimately will not follow through with these threats. However, Ford CEO Chris Feuell has stated that the company would be flexible in navigating any policy changes from the 47th president and could potentially revise its investment plans.

In conclusion, Ford CEO Jim Hackett remains optimistic about the future, despite the challenges posed by President-elect Donald Trump's proposed tariffs. The company is committed to working with the incoming administration to address trade disputes and find solutions that benefit both the industry and the American consumer. Ford is also actively gaming out various scenarios to determine the impact of tariffs on their business and how they would adjust pricing and production strategies accordingly. The company is prepared to be flexible in navigating any policy changes and is committed to maintaining pricing discipline in the face of increased costs.