Wednesday marked a tough day for U.S. automakers.
First came news of the death of FCA’s former CEO Sergio Marchionne, 66, who died from complications from shoulder surgery that he underwent roughly three weeks ago in Zurich. Former Ram and Jeep head Mike Manley is now at the helm as FCA employees and rivals Ford and GM mourn the passing of the tenacious Marchionne who is credited for steering the company away from bankruptcy towards profitability and noteworthy respect.
Later today came the news that Ford had joined FCA and GM in cutting its earnings per share (EPS) outlook for the year. Ford said its EPS drop of five percent was owed to a production drop stemming from a Michigan parts factory fire in May and lackluster results in China, according to Investor’s Business Daily.
Amid the news of declining earnings outlooks at all three major U.S. OEMs there’s been plenty of talk centering on President Trump’s tariffs on imported steel and aluminum. Cummins CEO Tom Linebarger wrote in an op-ed published today in The New York Times that tariffs are going to hurt American companies.
Criticism of Trump’s tariffs crosses party lines. Nationally syndicated radio and TV host Mark Levin, an outspoken conservative attorney who worked in the Reagan administration, also believes the tariffs will hurt the auto industry, related businesses and consumers.
Today, we reached out to Ford, GM and FCA for feedback on the tariffs as they relate to the pickup and van segments. FCA respectfully declined. Each OEM was presented with the same three questions via email.
HWT: Does GM anticipate an uptick in prices on its trucks and vans because of the tariffs?
GM: GM continues to assess the potential impact of all the recent proposed trade and tariff actions. These actions are inter-related and must be viewed holistically.
HWT: What is GM’s stance on tariffs?
GM: There’s no question we’ve experienced headwinds from rising prices on steel and aluminum that are largely a reaction to recent changes in trade policy. We have long supported policies that promote a level playing field for trade around the world because success in global markets also helps to increase jobs in the U.S.
HWT: Does GM expect to see a drop in new vehicle sales because of the tariffs?
GM: With regard to new vehicle sales, we project the new crossovers launched in 2017 and the trucks launching in 2018 and beyond will keep our sales momentum going.
Ford responded with the following statements:
Ford is urging the U.S. government to lower, not raise, barriers to trade. Higher tariffs do not benefit our customers or our employees.
While we source 95% of steel and 98% of aluminum in the U.S. for our U.S. vehicle production, we communicated to the Administration during its 232 investigation in 2017 that tariffs on imports of these commodities will likely result in higher prices for them here at home.
We will continue to evaluate and make the necessary decisions to remain competitive from increases in domestic commodity prices as a result of this steel/aluminum tariff action.
GM’s response on Marchionne’s passing:
We at General Motors offer our condolences to Sergio Marchionne’s family and friends. Sergio created a remarkable legacy in the automotive industry. Our thoughts are also with our industry colleagues at Fiat Chrysler as they deal with this sudden loss. – Mary Barra, Chairman and CEO of General Motors.
Ford’s response on Marchionnes’s passing:
Sergio Marchionne was one of the most respected leaders in the industry whose creativity and bold determination helped to restore Chrysler to financial health and grow Fiat Chrysler into a profitable global automaker. His extraordinary leadership, candor and passion for the industry will be missed by everyone who knew him. Our thoughts and prayers go out to his family at this difficult time. – Bill Ford, executive chairman, Ford Motor Company.
This past weekend, after learning of Marchionne’s failing health, FCA Chair John Elkann said in part:
What struck me about Sergio from the very beginning, when we met to talk about the possibility of him coming to work for the Group, even more than his management skills and unusual intelligence, were his human qualities, his generosity and the way he understood people.
Over the past 14 years together we have lived through successes and difficulties, internal and external crises, but also unique and unrepeatable moments, both personal and professional.
For so many, Sergio has been an enlightened leader and a matchless point of reference.
For me, he has been someone with whom to share thoughts and in whom to trust, a mentor and above all a true friend.
He taught us to think differently and to have the courage to change, often in unconventional ways, always acting with a sense of responsibility for the companies and their people.
He taught us that the only question that’s worth asking oneself at the end of every day is whether we have been able to change something for the better, whether we have been able to make a difference.
And Sergio has always made a difference, wherever his work took him and in the lives of so very many people.
Today, that difference can be seen in the culture that he introduced in all the companies he has led, a culture that has become an integral part of each and every one of them.