Automobility LA, once billed as the Los Angeles Auto Show press days, kicks off this week at the Los Angeles Convention Center. This year the auto show has rebranded itself as all about the future — but what kind of future that will be after the unexpected outcome of the presidential election is uncertain. The stakes are high as the industry is on the precipice of introducing self-driving cars, implementing better fuel economy standards, and increasing its presence in China.
It’s a week likely to be suffused with irony, awkwardness, and many questions after the recent turn of events and the many ways a Trump presidency could alter the transportation landscape. The Automobility show has been marketed as the show that brought together “everyone that matters: Automakers, tech executives, disruptors, entrepreneurs, investors, designers, developers, dealers, government officials.” Panel topics include autonomy, cyber security, and flying cars; no one knows exactly where a Trump administration lands on these issues. From what he said at the campaign trail, Trump’s vision seems to be looking back in some ways, while the auto industry is barreling toward the future.
In what was likely planned as a So-Cal move to tap into CES mojo and for LA to differentiate itself from the North American International Auto Show held in Detroit in January, Automobility is more poised to show how carmakers adapt their strategies on the fly. In the days leading up to the show, the organizers say the agenda will go on as planned.
“It is very difficult to predict how a Trump Administration will affect the auto industry.”
However, the mood among auto executives attending Automobility and speaking to the press, undoubtedly, will be one of uncertainty. Trump has offered very few definitive plans and it is unclear which of his rash remarks during the campaign will come to fruition. Even analysts are cautious about speculation. “There are many unknowns so it is very difficult to predict how a Trump administration will affect the auto industry,” Michelle Krebs, a senior analyst for AutoTrader told me.
One area of speculation is whether or not hard-fought fuel economy standards will be nixed. “On one hand, automakers may be glad about for that pressure to be off because those standards were going to be difficult and expensive to meet,” Krebs says. “On the other hand, automakers are global and other countries are unlikely to back off from their stricter fuel economy and emissions standards so many of those vehicles will still have to be built. And what of electric vehicles and solar? What does this all mean for Tesla?”
Then there are the economic questions about what car buyers will do when Trump takes office.
But Trump’s comments on trade and jobs are the biggest wild card in the car business. If Trump stays true to his promises, he will focus on restoring lost manufacturing jobs in the US, instead of preparing workers for the jobs of the future that the auto makers are desperate for.
Some groups that publicly supported Hillary Clinton, are in favor of Trump’s vision for limiting trade, a sign that there could be some common ground. UAW President Dennis Williams expressed his hope that Trump would take down the North American Free Trade Agreement in his remarks on Friday. “NAFTA is a huge problem for the American people. There’s a 35 percent tariff on vehicles coming in and his position for trade is right on,” he told reporters on a conference call.
If NAFTA ends, the auto industry faces huge costs, and are likely scrambling to sort out how this could play out. Several automaker imports from China, such as General Motors’ Buick Envision and Volvo interest in bringing Chinese-built vehicles to the US. “Every automaker is now huddling to come up with contingency plans if NAFTA is upended,” Krebs said. “Candidate Trump insisted he would ditch NAFTA, apply a 35 percent tariff on imports from Mexico, and made Ford a target with its under-construction plant for small cars in Mexico. Ford is not alone by any means. General Motors just started bringing its Chevrolet Cruze hatchback from Mexico, for instance.”
Today Mark Fields, CEO of Ford, gave the Automobility keynote address about Ford’s vision for the future, and warned about the impacts of Trump’s proposed tariff. It was only a month ago that Trump and Ford were sparring on Twitter. Ford sent me a statement congratulating the election winners. “We agree with Mr. Trump that it is really important to unite the country — and we look forward to working together to support economic growth and jobs.”
One thing that is certain is there are many areas where the administration’s impact could alter the direction we were headed. When I asked show organizers if the election would affect agenda, I was told “no.”
But, this week, it’s anything except business as usual.