Brent Snavely

Detroit Free Press

Fiat Chrysler CEO Sergio Marchionne said today the automaker needs clarity on free trade policies from president-elect Donald Trump before the company can make decisions on any future investments in Mexico.

Marchionne also said he needs to know what U.S. automotive regulations will be as it develops new cars and trucks.

“I need clarity. I think we all need clarity,” said Marchionne when asked about Trump. “And we are not the only ones that need clarity.”

Trump has frequently suggested he would push a 35% border tariff on goods imported from Mexico and wants to renegotiate the North American Free Trade Agreement. Trump made the revision of free trade agreements, and specifically NAFTA, a centerpiece of his campaign.

If that were to happen, Marchionne said FCA would consider closing plants in Mexico.

“It’s possible that if economic tariffs are imposed . . . and are sufficiently large, it will make production of anything in Mexico uneconomical and we would have to withdraw,” Marchionne said. “It’s quite possible.”

On the campaign trail, Trump frequently took aim at Ford for deciding to move its small car production from Michigan Assembly in Wayne to Mexico. Last week, Ford reversed course and canceled plans to build a $1.6 billion plant in Mexico and said Trump's "pro-business policies," along with declining car sales, were factors.

While Trump largely ignored other automakers during the campaign he criticized General Motors for making a version of the Chevrolet Cruze in Mexico and selling it in the U.S. and Toyota for its plans to build a $1 billion plant in Mexico to make the Corolla.

“I think we will adjust whenever the rules get changed, if they get changed. We have no choice in this. We are not policy setters,” Marchionne said during a press conference at the North American International Auto Show in Detroit. “I am not sure exactly what the rules are. Let’s wait.”

Marchionne’s comments come one day after the automaker announced plans to invest $1 billion at its plants in Warren and Toledo and add 2,000 jobs. The company confirmed plans on Sunday to make the Jeep Wagoneer and Grand Wagoneer at its Warren Truck Assembly plant by 2020 and to make a new Jeep Wrangler pickup at its Toledo Assembly South plant in Toledo.

That was has been in the works for more than a year, and had nothing to do with Trump or his policy ideas, Marchionne said.

“It has been part of the discussion going back to 2015 with Dennis Williams and the UAW,” Marchionne said.

Nevertheless, Trump praised the Jeep investment in a tweet on Monday.

Marchionne also said the investment at the Warren plant also could result in production of heavy duty pickups made in Mexico being moved to the Warren plant, a move that would also please the incoming president.

FCA also is investing in Mexico. The automaker has spent $850 million to retool its plant in Tolcua, Mexico, to build the all-new Jeep Compass, which was previously built in Belvidere, Ill.

Marchionne said today that production of the Compass in Mexico will begin later this month and will go on sale by March.

The Compass that the automaker will produce in Mexico will be sold in the U.S. and in many other countries around the world.

FCA has seven assembly, engine and stamping plants in Mexico and employs 11,659 workers there.

Marchionne also said automakers need clarity on fuel economy and greenhouse gas emissions. The industry agreed to regulations in 2011 that covered the industry from 2012 to 2015.

A review of those regulations began last year but has not been completed. Automakers have been lobbying the Obama administration for relaxed regulations while the government has been saying no changes are needed. The incoming Trump administration might be more willing to make changes.

Marchionne, who has been CEO of both Chrysler and Fiat since the Italian automaker took a controlling interest in the automaker in 2009, also confirmed today that he plans to retire after 2018. Today, Marchionne said his retirement will occur in early 2019.

Contact Brent Snavely: 313-222-6512 or bsnavely@freepress.com. Follow him on Twitter @BrentSnavely.

A look at FCA's operations in Mexico: