Facts are under assault in 2020.
We can't fight back misinformation about the election and COVID-19 without you. Support trusted, factual information with a tax deductible contribution to PolitiFact
I would like to contribute
If Your Time is short
Trump said an auto plant was coming to North Carolina and that five Japanese plants were coming to Michigan, when none were.
Compared with the previous four years, the level of automaker investments has fallen under Trump.
Sales have declined since 2016 and jobs plateaued in 2018.
At a September rally in Freeland, Mich., Trump described great success in reviving automotive jobs.
He boasted that he wrangled a promise from Japan’s Prime Minister Shinzo Abe for Japanese companies to expand in the U.S.
"They announced five car companies are coming to Michigan," Trump told the crowd.
They aren’t coming — not five, not one.
During a nationally broadcast town hall on NBC, he talked up car plants again.
"Car companies are moving into Michigan, into Ohio, into South Carolina and North Carolina."
There are no automakers headed for North Carolina, a state that stands out in the region as a perennial also-ran for major auto investments.
"We've wondered about why North Carolina gets onto finalist lists, only to come up short," said Miami University professor James Rubenstein, a leading auto industry researcher.
Nonetheless, boasting about resurgent auto investments has been a central part of Trump’s sales pitch in industrial states like Michigan and Ohio that he managed to flip after Barack Obama won them twice.
It’s not as though there haven’t been any automotive bright spots during Trump’s three and a half years in office. Fiat Chrysler is building a new Jeep plant on a shuttered site in Detroit. Toyota and Mazda are opening a joint-venture plant in Alabama. Volkswagen is adding a second assembly line to its plant in Chattanooga, Tenn. And BMW continued to expand its giant manufacturing hub in South Carolina.
But there have also been setbacks: GM shuttered and sold its small-car factory in Lordstown, Ohio — a darling of the Obama administration’s effort to push fuel-efficient vehicles. (It’s building an electric-vehicle battery plant nearby.) And it closed a pair of component plants in Maryland and Michigan.
At issue is Trump’s oversell, and his effort to tie new investments to his policies. The reality is that investments are down compared with the years before Trump took office, for reasons that have more to do with market trends, labor deals and product cycles than with government policy. And even before the coronavirus pandemic slammed the economy, manufacturing jobs in the auto sector had plateaued.
By several key measures, leaving the pandemic impact aside, the auto industry has leveled out, and in some ways declined.
Kristin Dziczek, vice president at the Center for Automotive Research, said investment follows the market.
"When the market was growing, the car makers wanted to invest, Dziczek said. "As our market has saturated or matured, investment has slowed down."
Dziczek’s group compiled the numbers for all major investments announced between 2013 and 2020. The total includes everything from retooled factory lines to entirely new assembly plants. From 2013 to 2016, $47.3 billion in work was announced. From 2017 to 2020, there has been $38 billion in projects, or nearly $10 billion less during the Trump years.
Dziczek said the surges every four years have to do with United Auto Workers union negotiations.
"The UAW bargains for investments, so four years of investments for Fiat Chrysler Automobiles, Ford and GM are piled into those bargaining years," Dziczek said.
Automakers also face a pivot point in technology. With both electric cars and autonomous vehicles on the horizon, they need to balance their investments in auto plants and factory jobs — the things Trump likes to call attention to — against research and development for the cars and trucks that will be on the roads within the next decade.
Overall sales of everything from compacts to pickup trucks match Dziczek’s point that investments follow the market. Total sales don’t show as steep a decline as investments, but they do show a dropoff since the 2016 peak.
As sales have eased off, so has U.S. production. U.S. automakers have trimmed many slow-selling car models out of their portfolios, and focused on more profitable trucks and SUVs. They’ve also tried to keep supplies tight to avoid having to spend money on sales incentives.
"It’s been a steady downward trend," Rubenstein said.
Trump’s bottom line is that his policies have produced jobs, but the picture there is less dramatic than his words. Since 2018, auto industry jobs have largely held steady. The increase before then was part of a trend that dates back to 2010, when the U.S. industry began to recover from the 2008-09 economic crisis.
Broadly, the numbers add up to a market that has reached a point of equilibrium, with sales, production and jobs aligned to support moderate growth and preserve profits.
On the stump, Trump talks about the impact of two policies — the renegotiated regional trade agreement with Canada and Mexico, called the USMCA, and the 2017 tax cuts.
Dziczek said the USMCA will promote investment in North America.
"The USMCA was designed to influence investment and supply chain location decisions," she said. "It could be a factor in where investments are made."
The full effects have yet to play out.
As for the tax changes, including lowering the corporate tax rate from 35% to 21%, the initial impacts on car makers varied. Ford reported $617 million in tax benefits. GM reported a one-time expense of $7.3 billion as a result of the tax changes. GM said it was moving past that one-time event and would invest heavily in self-driving vehicles.
The coronavirus briefly shut down auto plants and dealerships, and sent auto sales plummeting. Trump and his administration point to an impressive rebound, and there is no question it is real. But Dziczek pointed to a shift in who is buying that may reveal some weaknesses in the market. New-car buyers are slightly older and wealthier than before.
Today, the average new-car buyer has an income of $105,000 a year, and two-thirds are over 50 years old. These are people, Dziczek said, who can either work remotely or don’t need to work at all.
"Wall Street’s V-shaped recovery has helped upper-income buyers and retirees," Dziczek said.
But trouble in the broader economy could put that sales recovery at risk, Dziczek said. Trump speaks of "rounding the corner" on the pandemic but cases and hospitalizations are rising nationwide.
"These buyers may not remain insulated from job and income cuts the longer the pandemic rages on," she warned.
PolitiFact, Trump’s Michigan car industry claims veer off course,Sept. 11, 2020
PolitiFact, Fact-checking Donald Trump, Joe Biden in head-to-head town halls, Oct. 15, 2020
Bureau of Labor Statistics, Motor vehicles and parts employment, accessed Oct. 20, 2020
Knoxville News, Chattanooga Volkswagen plant breaks ground on electric SUV expansion, to add 1,000 jobs, Nov. 14, 2019
The Auto Channel, GM’s Mary Barra Now Sees U.S. Transition to Electric Cars Taking Decades, June 10, 2020
Wall Street Journal, Auto Makers Charge Ahead With Electric-Vehicle Plans, July 19, 2020
ProPublica, GM Closed the Lordstown Auto Plant. Now Ohio May Force a $60 Million Repayment.June 15, 2020
Detroit Free Press, President Trump again misleads on auto industry and much more at Muskegon rally, Oct. 17, 2020
Austin American Statesman, Tesla picks Austin for $1 billion auto factory, July 22, 2020
Industry Week, GM Reports $5.2 Billion Loss on Charge for US Tax Reform, Feb. 6, 2018
Interview, Kristin Dziczek,vice president, Center for Automotive Research, Oct. 20, 2020
Email exchange, James Rubenstein, professor of geography, Miami University, Oct. 16, 2020