Ford Motor Company’s Electric F -150 Lightning In Production Line at Dearborn, Michigan, in Michigan, on 8, 2022.
Jeff Kovalski | AFP | Getty images
Detroit – When President Donald Trump Indicated last week A vengeance from 25% auto tariffHe suggested that vehicle manufacturers would be allowed to give more time to increase vehicle production and parts.
Trump said on 14 April, “They need some time because they are going to make them here.”
While the motor vehicle officer and expert agree that more time will be helpful, an extension to increase American manufacturing is not so simple.
For one thing, an additional 25% auto parts tariffs are scheduled to be effective by May 3, which will increase the cost of a vehicle, even if it is assembled to the assembled states instead of imports.
And for the other, vehicle manufacturers and suppliers do not “move” plants only, such as some politicians have called. Planning and construction takes years to move production lines – and may be expensive.
The actual construction of a assembly plant is to be used with the construction of infrastructure such as water and energy supply and the supply chain of a parts among other ideas. This site is followed by any possible changes in determination, purchase and zoning.
Such features like a new 16 million-class-foot plant Hyundai Motor In Georgia, thousands of acres of land may be required and it may include millions of square feet of factory space.
“All those things have to fall into place,” Doug Bates said, the veteran of an auto industry who is the president JD Power’s Motor Vehicles Division“This is a very, very complex process.”
Permission alone for a new plant can take six to 12 months. According to Colin Shaw, president of the MEMA Original Equipment Suppliers Association, from another 12 months to 18 months, if not more, if not more, to build the convenience, to build the facility, it may be used to tooling and production for another year or more.
Trump’s main types of plants that want automakers to manufacture in the US, there are large, multivio-dollars assembly plants that take years in construction. Full assembly plants employ thousands of workers and are more and more manufacturing cities, which are made up of a body shop, paint plant, stamming and other supportive facilities.
Even small supplier plants that may be able to raise more quickly, can still take years and are often built near large plants, according to industry officials and experts.
On 6 June 2022, Autovormers at Smirna Vehicle Assembly Plant in Nissan in Tennessee. The plant employs thousands of people and produces various types of vehicles including Leaf EV and wicked crossover.
Michael Welland / CNBC
“I am confident that there is a way of localization, but it is not overnight to make new models made somewhere else in the world,” Chairman of Christian Munier, Nissan America told CNBC. “Nissan is very fast, but it’s not a matter of months. It’s a matter of years.”
Meunier said that the goal of the automaker is “Max out” production At his largest American production plant among Trump’s tariffs, although he refused to specify a timeline to do so.
This week six of the top policy groups representing American motor vehicle industry Uncharacteristically joined forces To advocate the Trump administration against the implementation of the upcoming tariff on auto parts.
“President Trump has indicated an openness to reconsider the 25 percent tariff of administration on imported automotive parts – recently similar to the tariff relief approved for consumer electronics and semiconductors. This would be a positive development and reception relief,” read the letter.
New plants
The fastest way to increase American production is to use existing features, for which the supply chains have already been established, such as planning to Nissan.
The more expensive option is to build a new assembly plant, which may take time, but comes with a trickle-down effect for the community as suppliers work to make the production of some parts and components local.
According to the 2022 report, each direct job made in vehicle manufacture supports an average of 10.5 additional American jobs. Alliance for motor vehicle innovation business group.
The most recent new automotive assembly plant in the US is Hyundai’s “Metaplant” at Georgia.
The construction of the $ 12.6 billion project, which Trump has postponed as a success for American manufacturing, took about 2½ years. This does not include an unknown length for the ongoing ramp-up and site selection, permission and other processes of the plant in production.
Hyundai’s deadline was relatively early, which has a capacity of 300,000 vehicles annually, given the amount of investment and size of the plant and 8,500 jobs by 2031.
“If you are building a brand, you are going fast to complete it in two years, and everything should be ready to go to you. More likely, it is in a four -year range,” Mark Wakefield said, a partner and global automotive market lead of consulting firms Elixparters.
Jeep parents DescendantFormerly Fiat Chrisler took a similar construction time limit of 2.5 years and spent $ 1.6 billion to convert two powertrain plants into the first “new” assembly plant in about 30 years from 2019 to 2021.
There are unique examples of automakers, which forward the mountains and spend billions of dollars to achieve things more quickly. There was an odd case outside America Tesla Plant in China. The facility was allegedly constructed in 2019 in less than a year with the support of Chinese authorities.
Accelerated actions
Regarding the creation of completely new features, there are ways to increase American production faster and for low cost. In particular, if the product is made in more than one location and the automaker or supplier has additional, unused capacity.
Many vehicle manufacturers, such as General MotorsUse many plants to produce your highest-volume products. Detroit automakers produce their light-duty shaverlet silverlado in plants in Canada, Mexico and America
The day 25% tariffs were implemented on Trump’s imported vehicles, GM said that it will happen Increase production of full size pickup trucks Fort Wayne hire hundreds of temporary employees at their assembly plant near Indiana. Such a step is essentially a low hanging fruit for a company.
Autometers protect the production of their most profitable vehicles as much as possible. In the past, this means spending billions of dollars for a plant change or even the dual production of old and new models of the same vehicle.
Moving forward quickly can lead to its shortcomings. In 2019, to lose low production as its Ford Explorer SUV, Ford spent $ 1 billion to fully retiring his body shop and other improvements in the only Illinois facility that produces vehicles.
The entire process for Ford took 30 days, but the vehicle launched Was infamousThe company costs billions in recall and fix. At that time, Ford called it “one of the most complex renewal in the history of the company”.
“It is disastrous to be out of production in a section,” Bates said that who has worked Apple as well as Descendant And other car manufacturer.
Bates said that most companies would do a “Daisy Chen” in which they build another plant for a new model, while continuing to produce the old. This allows for an easy infection, but companies require plant space and capital to draw such a step.
To not mention, auto companies need certainty that regulations or trade policies will not change as construction is going on, resulting in billions of dollars in unnecessary expenses.
“This is not a flip of the switch,” Canada -based auto supplier Magna CEO Swami Kotagiri said during a meeting of an Auto Press Association near Detroit last week. “We have to look at it from a practical point of view. I don’t see how you can lift and move. It seems easy, but it is not.”
