Toledo area auto industry talks about possible NAFTA revisions

8/28/2018

Brian Sims, Jr., right, works on the final Jeep Wrangler JK produced Friday, April 27, 2018, at the Toledo Assembly Complex.

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An announcement Monday that the United States and Mexico have reached an “understanding” about revisions to the North American Free Trade Agreement was greeted with both optimism and caution by area auto industry representatives.

James Kamsickas, the CEO of Maumee-based auto parts maker Dana Inc., predicted all companies affected by the proposed changes would be happy about it.

Bruce Baumhower, president of UAW Local 12, which represents Jeep workers at Fiat Chrysler Automobiles’ Toledo plant, said this is “a big deal” for auto workers.

FCA deferred to its trade organization, the Auto Alliance, which said it is good that the 24-year-old NAFTA is being modernized. “We are pleased to hear that the U.S. and Mexico have reached a consensus on several issues, including automotive rules of origin, and we look forward to learning more,” the Alliance said. “Automakers urge the U.S. and Mexico to quickly re-engage with Canada to continue to build on this progress.”

Early Monday President Trump and U.S. trade officials announced they had reached an agreement with Mexico to change key parts of NAFTA. Changes affect agriculture and intellectual property rights, but significant revisions involve manufacturing in general and the auto industry specifically.

One change requires that 75 percent of parts of cars sold in North America now must be made in the United States or Mexico. Currently, 62 percent of parts must be made in the United States, Mexico, or Canada.

Another change requires that 40 to 45 percent of auto parts in cars sold must be made by workers earning at least $16 (U.S.) per hour.

The revised agreement — which President Trump said no longer would be called NAFTA — would last just 16 years, and be reviewed every six years.

Mr. Baumhower said the 75 percent rule would lead to more jobs, but the $16 an hour rule was the eye-opener. 

“We have had companies that were coming here that were paying people $12 to $14 bucks and after we organized them that went up. But to have that clause in our supplier industry, that would be huge,” he said.

Mr. Kamsickas, of Dana, was interviewed by financial news service the Street Inc. and said a revised NAFTA would benefit his company.

“Well, it’s a big deal because, you know, ultimately I think everybody’s looking for certainty and closure on what’s going to happen in trades, and tariffs, and everything else like that,” the CEO said. “You know, the synchronized manufacturing, especially having the mobility parts business, it’s really important that we can have that value chain coming from Mexico up into America, and sooner or later I assume we’ll get Canada in a good situation with the United States. So it’s all positive,” he said.

Ohio’s senators weighed in on the announcement.

“I look forward to reviewing the details but am pleased to see that there has been a breakthrough. As I’ve said many times, I believe we must do more to open markets to U.S. products, vigorously enforce our trade laws, and protect American jobs,” U.S. Sen. Rob Portman (R., Ohio) said.

U.S. Sen. Sherrod Brown (D., Ohio), a NAFTA opponent, said he’ll wait on the details, but this is an important step forward.

“I have been working closely with our top trade negotiator, [U.S. Trade Representative] Bob Lighthizer. In fact I just spoke to him again late last night. We still have a lot of work to do to bring Canada on board and write the legislation needed to make any deal a reality, and I will keep working with [Mr.] Lighthizer to make sure every detail is right for Ohio workers,” Mr. Brown said.

Rep. Jim Renacci (D., Ohio),  who is running against Mr. Brown for a Senate seat, released the following statement:

“I applaud President Trump for following through with yet another promise by delivering a fairer and more reciprocal trading relationship with Mexico. Today, the U.S. and Mexico reached a tentative agreement that will put in place stronger labor standards, allow for more agricultural trade, and will provide more opportunities for U.S. businesses to succeed. I look forward to further reviewing the agreement and continuing to work closely with the President to achieve better trade deals for Ohio workers and families.”

Contact Blade Business Writer Jon Chavez at jchavez@theblade.com or 419-724-6128.