Updated to include a statement from General Motors.
After months of attacking Ford (F) - Get Report for its plans to move production overseas, President-elect Donald Trump on Tuesday turned his attention to crosstown rival General Motors(GM) - Get Report , threatening to impose a "big border tax" on cars imported from Mexico.
Trump, who on the campaign trail lashed out at Ford's plans to move production to Mexico, in a tweet Tuesday said GM "is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border." Trump said the automakers need to "Make in U.S.A. or pay big border tax!"
GM responded to Trump's tweet, saying that all Cruze sedans sold in the U.S. are built in Lordstown, though it noted that a "small number" of Cruze hatchbacks made in Mexico are sold in the U.S.
GM builds the Cruze in Mexico as well as in about a dozen other locations worldwide, including at the Lordstown Assembly Complex in Ohio. GM last June said it would supplement Ohio production of the Cruze with capacity in Ramos Arizpe, Mexico, in a bid to keep up with what it called strong consumer demand for the vehicle.
The Lordstown facility at the time of the announcement was already running three shifts. However, GM said in November it would suspend the third shift indefinitely and lay off 1,200 workers at the plant because of lower demand.
The tweet continues a trend by Trump since the election to criticize individual companies over outsourcing plans and government contracts, with Boeing(BA) - Get Report , United Technologies(UTX) - Get Report and Lockheed Martin(LMT) - Get Report joining Ford among past targets. Past tweets saw shares of the targeted companies plunge immediately after, however, the impact of the president-elect's tweets on share prices might be diminishing: Shares of GM traded up slightly to $35.17 in early trading on Tuesday.
Automakers have been reluctant to debate Trump in the press, but privately they will argue that making lower-margin small cars in places like Mexico helps them to meet emissions standards and allow for a larger number of less-efficient SUVs to be manufactured in the United States, a boost to U.S. employment.
Labor costs in Mexico by some estimates are one-fifth U.S. levels, a huge advantage, but automakers will argue Mexico's free trade policies also make it more attractive to export the Cruze and other small vehicles from Mexico to markets in Europe and Latin America than it would be to export those vehicles from the United States.
Trump last month named GM CEO Mary Barra to his 16-member economic and job creation advisory board, perhaps creating an opportunity for an industry insider to discuss production matters with the president-elect in a private manner.
The Cruze has been in the political spotlight in the past. During the 2008 presidential campaign, a number of candidates made stops at Lordstown as GM was inching toward an eventual bankruptcy. In September 2009, newly elected President Barack Obama visited the factory as part of his tour to celebrate the government-backed auto industry rescue, celebrating plans to restart Cruze production there in 2010.