Toyota is latest Trump target

Associated Press

DETROIT

President-elect Donald Trump has trained his sights on Toyota in his latest effort to badger a company into building its products in the U.S. rather than Mexico.

Trump tweeted Thursday that if the Japanese automaker goes ahead with plans to build the compact Corolla in a new factory in Mexico instead of the U.S., it faces a “big border tax” when it ships the cars north.

The threat echoed those targeted at Ford Motor Co. and General Motors Co. Trump has repeatedly threatened Ford with a 35 percent tax on small cars made in Mexico, and this week he called out GM for importing cars from south of the border. He also has made similar threats against companies outside the auto industry.

Nearly all automakers build small cars in Mexico to take advantage of lower wages. Consumers generally pay lower prices for small cars, making it difficult to cover higher labor costs in the U.S.

Trump’s tweet incorrectly stated the location of Toyota’s new Mexican plant – it’s Guanajuato, not Baja – but he’s correct in saying that Toyota has plans to build the Corolla in Mexico. The automaker announced the new factory in April 2015, saying it will create 2,000 jobs.

Corolla production is to start in 2019 with a new model and would be moved from a factory in Cambridge, Ontario. Toyota also would keep building Corollas at a U.S. factory in Blue Springs, Miss. The Ontario plant will build more higher-priced midsize vehicles.

Toyota Motor Corp. didn’t directly respond to Trump’s tax threat, but said Thursday in a statement that production and employment in the U.S. will not decrease due to the Guanajuato plant. Toyota said it has invested over $21.9 billion in its U.S. operations, including 10 manufacturing facilities, 1,500 dealerships and 136,000 employees.

It said it has made considerable expansions in the U.S., creating American jobs, and had produced 25 million vehicles in the U.S. over the last 30 years.

Toyota Motor Corp. stock fell 2 percent in early trading this morning after Trump’s tweet.

Toyota in Japan had no further comments beyond what it released in the U.S., which did not directly address Trump’s tweet but stressed that Toyota has been in the U.S. for six decades and that the Mexico plant will not affect jobs or production in the U.S.