Toyota Target Of Trump's Latest Twitter Broadside

Toyota shares fell after US President-elect Donald Trump threatened the carmaker with tariffs over a new vehicle plant in Mexico
Toyota shares fell after US President-elect Donald Trump threatened the carmaker with tariffs over a new vehicle plant in Mexico. AFP / Kazuhiro Nogi




Toyota shares slumped Friday as Donald Trump threatened punitive tariffs over its new vehicle plant in Mexico, triggering a staunch defence from Japan's government which said its auto sector had made huge contributions to the US economy.

The world's largest automaker became the latest company to face Trump's wrath when he tweeted "NO WAY" to the company's plans for a new manufacturing plant in Mexico.
US President-elect Trump -- who takes office on January 20 -- has embraced the unorthodox tactic of using Twitter to intervene publicly in the affairs of major companies.




The 70-year-old Republican property mogul campaigned in part on bringing manufacturing jobs back to America's heartland and vowing to crack down on allegedly unfair trade practices.
"Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax," Trump tweeted on Thursday.
AFP / Gal ROMAToyota shares
Shares in Toyota took a hit in early trading just hours after the tweet, declining as much as 3.11 percent before paring losses to close 1.68 percent lower at 6,930 yen.
In November, Toyota celebrated the groundbreaking for the $1 billion plant in Guanajuato, in central Mexico -- not, as Trump said, in Baja California state that borders the US.
The company already has a factory making Tacoma pickups in Baja.
- Shares sag -
Earlier this week, Ford scuttled a plan to build a new factory in Mexico following criticism from Trump and shortly after he attacked General Motors for importing Mexican-made cars into the US.
GM says only a small number of such cars actually sold in the US are built in Mexico.
AFP/File / Mary SchwalmSupporters of Donald Trump stand outside a Toyota car dealer before a campaign event in Portsmouth, New Hampshire, on October 15, 2016
Shares of other Japanese automakers also sagged, with Nissan declining 2.20 percent to 1,173 yen and Honda down 1.90 percent to 3,501 yen.
Following the tweet, Japan's government rose to the industry's defence, with trade minister Hiroshige Seko saying that Japanese automakers have "contributed to (creating) 1.5 million jobs in the United States."
Seko also stressed in comments to reporters that Trump's administration needed to understand that the Japanese auto industry "has greatly contributed to the US economy".
Toyota meanwhile responded with a conciliatory statement, saying it looked forward to "collaborating" with Trump's government and stressed that the new plant would have no negative effect on its US factories.
"Production volume or employment in the US will not decrease as a result of our new plant in Guanajuato, Mexico announced in April 2015," the company said.
AFP/File / Eduardo Munoz AlvarezUS President-elect Donald Trump has warned car manufacturers they will face heavy border taxes on any vehicle they manufacture across the border in Mexico
Toyota employs 136,000 Americans and maintains 10 manufacturing facilities in the US.
The company said it exported more than 160,000 US-built vehicles to 40 countries in 2015, "helping to establish the US as a global export hub".
Toyota is planning to employ 2,000 workers to produce Corolla models starting in 2019 at the Guanajuato plant.
In an annual report filed last year, Toyota had said it would move production of Corollas from Canada to Mexico, beginning in 2019.
To meet rising demand, the company increased production at engine plants in Kentucky and Alabama between 2013 and 2014, and also raised capacity at a parts facility in West Virginia, according to the report.
Nissan chief executive Carlos Ghosn said after Trump's tweet that automakers would have to take care to maintain sufficient production in the US to supply its market and stressed his company was well positioned.
"You know we have the largest plant, not only in the United States, but in the Americas, in Tennessee," he told reporters at a trade show in Las Vegas.

Source: AFP
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