Feds to Big Auto: Spill It
The U.S. Commerce Department wants automakers to whisper in its ear. And by whisper, we mean fill out a 34-page questionnaire detailing all their secrets — the nitty gritty of product planning, suppliers, and finances not already disclosed in public filings — under threat of financial penalty or imprisonment.
As one would assume, this latest chapter in the Commerce Department’s investigation into the possibility that imported autos pose a national security threat to the U.S. isn’t going over well.
“The breadth and depth of this request is invasive, requiring massive amounts of proprietary and confidential business data from global operations — all under the pretense of national security,” Gloria Bergquist, spokeswoman for the Alliance of Automobile Manufacturers, told Bloomberg. The Alliance represents several unnamed automakers who received the questionnaire.
“Frankly, it’s stunning from an administration committed to getting government out of the way of business,” Bergquist said.
The Trump administration kicked off the investigation to determine whether tariffs are needed on imported vehicles and parts. Automakers protested the threatened 25-percent tariff, claiming U.S. consumers would face steep price hikes in the wake of any new import levy. Even vehicles built in the U.S., like the Toyota Camry, stand to see a not-inconsequential MSRP boost.
Many see the threats as Trump’s way of forcing the European Union to back off its own 10 percent import tariffs on foreign autos.
To automakers that received the questionnaire, however, the more immediate issue is the discomfort that comes from spilling your secrets. From Bloomberg:
The Trump administration wants such things as how much each company’s research budget goes to specific areas such as autonomous driving, electric drive, connected vehicles, and lightweight technology. The questionnaire also seeks a list of suppliers for major vehicles systems and where they’re located.
The Trump administration also wants details about company business plans from now until 2020. One section of the questionnaire asked for plans for every global plant, requiring the companies to reveal whether the plants will be expanded, contracted, modernized, or closed. The administration also asked the companies for explanations about why they manufacture in foreign trade zones.
The survey also asks if imports hurt sales, profits or margins. And it directly asks, “How has import competition affected your U.S. manufacturing operations, sales, employment, planned expansions, investments, etc. with respect to the production of passenger cars, light trucks, SUVs and vans from 2013 to Q2 2018.”
Former Commerce Department chief economist Susan Helper said that, in the past, such questionnaires usually targeted the defence industry.
“I can see both sides on this — it is burdensome for companies, but on the other hand it’s important for policy makers to understand global supply chains as they have an increasing impact on the U.S. economy,” she said.
A hearing scheduled for this coming Thursday in Washington will see 45 industry representatives testify in front of the Commerce Department. Commerce Secretary Wilbur Ross has until February to conclude the investigation and issue a recommendation to Trump.
[Image: Fiat Chrysler Automobiles]
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