First the Obama administration bailed out much of the American auto industry, pulling it out of a tailspin. Then it reshaped the business, with regulations and policies intended to increase fuel economy, improve safety and add jobs.
Now, under President-elect Donald J. Trump, the industry is bracing for another wholesale makeover. Perhaps no industry could be affected in more ways by the new administration than the auto business.
That became all the more apparent this week, with Mr. Trump’s selection of Scott Pruitt — the Oklahoma attorney general who is a climate-change skeptic and close ally of the oil and gas industry — to run the Environmental Protection Agency.
The changes under the Trump administration could include possible tariffs that will raise prices on imported vehicles and parts, fewer subsidies for electric cars and policies that discourage automakers from moving products from American factories to Mexico.
And any scaling back of fuel-economy goals by the Trump administration, if Mr. Pruitt’s climate change skepticism and embrace of fossil fuels translates to policy, could also influence the types of vehicles the industry plans to build in coming years — and where it builds them. Bigger models like sport utility vehicles and pickup trucks are less fuel-efficient than cars but more profitable for automakers. And their steeper price tags can help pay for the higher labor costs of making them in the United States.
In a move that underscored the new psychology since Mr. Trump’s election, Ford Motor — which had been a target of his criticism — in mid-November decided to keep building a Lincoln S.U.V. in Kentucky rather than Mexico.
And yet, for a capital-intensive industry that routinely makes billion dollar bets on new factories and products, the uncertainty is unnerving.
“Our membership is just perplexed right now,” said Gloria Bergquist, vice president for public affairs for the Alliance of Automobile Manufacturers, which represents a dozen carmakers, including General Motors, Ford, Volkswagen and Toyota, on safety and environmental issues. “This is all uncharted territory.”
Mr. Trump’s campaign was studded with promises that could upend the status quo, including some to relax policies intended to cut greenhouse gas emissions and to renegotiate the North American Free Trade Agreement. He has yet to detail any coming changes. But pursuing policies similar to those he promoted in his campaign could change the entire manufacturing industry by penalizing companies for investing overseas or by stifling free-flowing global trade.
Mr. Trump has yet to specify changes he might make to Nafta or other industrial policies. But his cabinet appointments, particularly the selection for commerce secretary of the billionaire investor Wilbur L. Ross Jr., who has suggested that he is receptive to some of the antitrade views favored by Mr. Trump, indicate that the incoming president may take an aggressive approach to modifying trade deals and other tenets of the outgoing Obama administration.
One industry analyst, Ron Harbour of the consulting firm Oliver Wyman, said many voters in Rust Belt states like Michigan and Ohio backed Mr. Trump primarily because of his promises to restore manufacturing jobs in the United States.
“So there probably will be pressure to do something,” Mr. Harbour said. “And if he doesn’t do anything, they probably are not going to be too thrilled.”
Read more of the original article at The New York Times.
