The company last year announced plans to build the next-generation Cruze in Mexico.
[Updated with GM statement] President-elect Donald Trump has turned his NAFTA criticism from Ford to General Motors, threatening to impose tariffs for the next-generation Chevrolet Cruze.
Every US-market Cruze sedan is currently manufactured at GM's Lordstown, Ohio, assembly plant. However, the company does import a small number of Cruze Hatchbacks from Mexico. The company last year announced plans to invest $350 million at its Ramos Arizpe plant in Northeastern Mexico to produce the next-generation model.
"General Motors is sending Mexican made model of Chevy Cruze to US car dealers -- tax free across border," Trump wrote in a Twitter rant. "Make in USA or pay big border tax!"
The Cruze's departure was part of a larger $5 billion plan to expand production capacity south of the US border. The US-market Cruze hatchback is already imported from Mexico.
To be clear, GM previously claimed it would continue to build the Cruze in Lordstown once the Ramos Arizpe plant ramps up. Some of the factory output will be sold locally, eliminating the need to import the cars to Mexico from South Korea, but the company has not explicitly ruled out an eventual reduction or elimination of output from Ohio.
As car sales struggle to maintain momentum amid strong demand for crossovers and SUVs, many automakers have begun to shift production to Mexico where profit margins are padded by cheap labor. Cruze sales fell by more than 18 percent in the first 11 months of the year.
Trump initially focused on Ford but appears to have moved on to other targets after the Blue Oval killed plans to move the Lincoln MKC to Mexico.
Interestingly, GM chief executive Mary Barra will soon get a voice in the matter when she joins Trump's economic advisory panel. She expressed hope to "contribute to a constructive and open dialogue about key policy issues." Mexico almost certainly will be high on the list of potential topics.
Trump's NAFTA comments appear to call call for tariffs for products that shift from American-made to made-in-Mexico under Trump's presidency. Such a penalization system presumably requires a new regulatory framework that has not been formally introduced. If retribution is applied retroactively, GM is unlikely to retool Lordstown to build the Cruze hatch and would presumably weigh the tariff costs against pulling the model from the US market.
GM statement: "General Motors manufactures the Chevrolet Cruze sedan in Lordstown, Ohio. All Chevrolet Cruze sedans sold in the US are built in GM's assembly plant in Lordstown, Ohio. GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the US."