Automakers Fear NAFTA Changes

Photo: Ford Motor Co.

U.S. automakers are pushing President Trump "not to make any changes to NAFTA that would jeopardize production ties with Canada and Mexico that have been built up over the last 25 years," according to a Politico.com ProTrade post.

Understandably, the car makers don't want to mess with success. They are now "performing at levels that really haven't been seen in decades," said Charles Uthus, vice president for international policy at the American Automotive Policy Council, stated the Politico report.

AAPC represents the common public policy interests of its member companies: FCA US LLC (Fiat-Chrysler) Ford Motor Company and General Motors Company.

Politico reported that Uthus credits NAFTA for much of that success and contends that hiking tariffs between the three NAFTA signatories would hurt the competitiveness of the North American region. The report also stated that parts manufacturers don't want any changes to the agreement that would “"upset the supply chain."

The Big Three auto makers' concern reflects the advantages it has reaped from operating in the common U.S.-Canada-Mexico market since the NAFTA agreement went into effective on January 1, 1994— over 23 years ago.

Perhaps in recognition of the inevitability of Trump pursuing some reforms of NAFTA, AAPC President Matt Blunt issued a statement on May 18 that seeks to avoid breaking eggs by whipping NAFTA into a tastier omelette. “NAFTA has helped to boost the global competitiveness of the U.S. auto industry sector and we support modernizing the agreement in ways that will further strengthen North America as a manufacturing powerhouse, stimulate economic growth and drive job creation,” he stated.

Blunt said that AAPC encourages administration “to seize this opportunity” to work with Canada and Mexico “to support strong and enforceable currency manipulation disciplines in trade agreements and encourage the global acceptance of vehicles built to U.S. auto ...Read the rest of this story

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The roots of this soft secondary market date from late 2015. Large fleets had placed large orders for trucks as the U.S. economy began to rally in the 2013-2014 timeframe. But the economic upsurge didn't last. By the 3rd quarter of 2015, retail orders were lagging and manufacturing levels fell off as a result. As freight volumes dropped in response, fleets began to shed suddenly excess equipment, resulting in high volumes of relatively low-mileage trucks, in excellent condition landing on dealer lots all over the country.

“Yes. It's a classic truck glut,” said Chris Visser, senior analyst and product manager, commercial vehicle valuation services for J.D. Power and Associates. “Supply in the used truck market still outstrips demand, although we have tracked a gradual trend since January or February of this year indicating more retain buyers are purchasing – which of course goes hand-in-hand with the excess inventory and the overall quality of the used equipment available today.”

Citing J.D. Power's Commercial Truck Guidelines Industry Update, released earlier this month, Visser noted that the average sleeper tractor sold wholesale in March was 70 months old, had 535,833 miles, and brought $29,314. Compared to February, trucks sold in March were one month newer, had 1,515 (0.3%) fewer miles, and brought $85 (0.3%) more money. Compared to March 2016, the average sleeper sold this month was 12 months newer, had 85,719 (13.8%) fewer miles, and brought $4,385 (13%) less ...Read the rest of this story

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