Detroit automakers warn of ‘significant’ disruption from auto tariffs

Messages from General Motors $GM ( ▲ 1.52% ) and Ford $F ( ▲ 2.11% ) leadership to employees provide more insight into what industry leaders think about the tariffs and how they are working to navigate the levies—as the effective date for the measures approaches.  

The details: Memos obtained by the Detroit Free Press reveal that while leadership at both companies support President Trump’s vision of strengthening U.S. auto manufacturing, leaders are certainly concerned about the 25% tariffs that are scheduled to go into effect on April 2.

GM’s leadership memo—which was unsigned and posted on an internal website (dated March 27)—included the following key points. 

• Tariffs will have an impact on the company’s manufacturing footprint and supply chain, though the memo provided no detail on the scope of the impact.  

• Plans to mitigate the impact entail keeping the company “nimble based on any tariffs announced by the U.S. administration.” 

• The GM memo also indicates that GM has been working to assess the areas in which the company could be most impacted by the tariffs.  

Ford’s memo to employees—sent by Ford CEO Jim Farley (also dated March 27)—was more candid about the impact of the tariffs.       

• The memo states that Ford is still studying the tariffs but anticipates that they are “likely to be significant across our industry.”  

• The CEO also noted that nearly 80% of Ford vehicles sold in the U.S. are made in the states, but "this does not mean Ford is immune to the impact of tariffs, which could be meaningful."

Between the lines: Farley’s memo reflects some of the views the CEO has expressed previously about levies, though they were more specific to the 25% tariffs on Mexico and Canada.

• At a Wall Street conference in February, the Ford CEO told analysts, "a 25% tariff across the Mexico and Canada borders would blow a hole in the U.S. industry that we've never seen."

• In February, Farley also described the 25% tariffs on steel and aluminum, with the levies on Mexico and Canada, as adding "a lot of cost, and a lot of chaos" to the industry. 

Bottom line: While GM and Ford might be publicly supportive of U.S. manufacturing goals, their internal messages reveal real concerns about cost, disruption, and the pressure to stay agile in the current trade environment.

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