Each year, the factory of ITB Precisietechniek, a Dutch manufacturer, produces hundreds of millions of its products at its plant in Querétaro, a prosperous industrial city some 150 miles northwest of Mexico City.
Continue Reading Below
The plant is what those in the auto industry call a “tier two” manufacturer. Its machines mold plastics into components, which are then shipped off to a different company that uses them to produce car parts. Those, in turn, will end up in cars sold to U.S. consumers.
“Business has been good,” general manager Pieter de Korver told FOXBusiness.com. “We’ve expanded our facility last year and have enjoyed continued growth over the past few years.”
ITB’s plant, located on an industrial park on the outskirts of the city, is just one of the many hundreds of manufacturers that form the complex supply chain of the Bajío cluster. The region in Central Mexico is the heart of Mexico’s automotive industry. A large chunk of the 3.6 million cars the country produces each year are made here. Most of them are shipped to the United States.
It took Donald Trump only a few updates on Twitter to throw this thriving industry into disarray.
Thank you to Ford for scrapping a new plant in Mexico and creating 700 new jobs in the U.S. This is just the beginning - much more to follow
Continue Reading BelowAdvertisement
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!January 3, 2017
In a series of comments posted in the first week of January on his social platform of choice, the U.S President-elect threatened to slap “big border taxes” on several major international carmakers, in an apparent attempt to coerce them into moving production to the United States.
After first berating General Motors for sending its “Mexican made model of Chevy Cruze to U.S. car dealers-tax free across the border” on January 3rd, Trump thanked Ford the next day for cancelling a planned $1.6 billion investment in a plant in San Luis Potosí state, scrapping 2800 jobs in the process.
Next on his Twitter-hit list was Toyota, which was threatened not to build a new plant to produce its Corolla model in the northern Mexican state of Baja California, again under penalty of a “big border tax.”
Even if the President-elect didn’t always have all the details straight– the new Corolla plant will be built in the state of Guanajuato, in the Bajío, while an already existing factory in Baja produces Tacoma trucks - the threats sent a nationwide shiver through Mexico’s automotive sector.
Trump's Tweets Can Rattle an Entire Industry
Trump Tweets Mean Business
Trump Becomes Star of Detroit Auto Show
Auto executives, with eye on Trump, highlight U.S. investments
Auto industry execs react to specter of Donald Trump
“We’ll have to wait and see what happens, but his comments certainly caused a stir,” said Pieter de Korver. “I’ve never experienced such a sudden change in politics, someone willing to act the way Trump does.”
Should the President-elect make good on his promises to slap punitive taxes on carmakers operating in Mexico, one of the country’s most successful industries would come under serious threat. Over the past two decades, few places in the world have seen its auto industry blossom as it did here.