SEVERE WX : Winter Storm Warning - Winter Weather Advisory View Alerts

The trade war is starting to hurt American automakers

The trade war is making things difficult for American automakers.General Motors and Fiat Chrysler reported low...

Posted: Jul 26, 2018 1:06 AM
Updated: Jul 26, 2018 1:06 AM

The trade war is making things difficult for American automakers.

General Motors and Fiat Chrysler reported lower profit Wednesday and cut their forecasts. Fiat Chrysler stock dropped 12%. GM fell 4.6%.

GM cited rising commodity prices. Steel and aluminum prices have gone up since the Trump administration imposed tariffs on those imports. That includes domestic steel and aluminum, which are more expensive without the threat of lower-priced imports.

The Trump administration is also considering a tariff on imported cars and trucks, as well as on auto parts. Every car assembled at US auto factories includes parts from foreign manufacturers.

Related: Sergio Marchionne, the CEO who saved Fiat and Chrysler, dies at 66

Automakers typically have contracts that lock in prices for most of the commodities they buy. Richard Palmer, chief financial officer of Fiat Chrysler, said the company is already seeing some higher prices and is wary about prices later, after existing contracts expire.

"I'm not overly concerned today," he told investors on a conference call, "but we do need to keep an eye on commodity prices as we move into the first part of 2019."

GM said commodity costs rose $300 million in the second quarter, and have risen $500 million this year.

The trade war is causing problems for automakers despite strong sales, especially in United States, where low unemployment is helping business.

GM reported higher sales in North America and in China, now its largest market for car sales. It was hurt by currency devaluation in South America.

Fiat Chrysler reported higher revenue, led by market share gains in North America, which accounts for more than half of its sales.

Shares of Ford, which is scheduled to report results after the market closes, also were lower in early trading.

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 154062

Reported Deaths: 2194
CountyCasesDeaths
Multnomah31723527
Washington21001211
Marion18279284
Clackamas13289175
Lane10127124
Jackson8224110
Umatilla761481
Deschutes592258
Yamhill374564
Linn354956
Malheur333958
Polk301642
Klamath276854
Douglas240252
Benton230316
Josephine230349
Jefferson194127
Coos140119
Union127119
Columbia124121
Wasco121926
Lincoln112520
Hood River106129
Morrow104114
Crook77918
Clatsop7766
Baker6467
Curry4116
Tillamook4092
Lake3746
Harney2716
Grant2221
Wallowa1424
Gilliam531
Sherman530
Wheeler221
Unassigned00
Eugene
Cloudy
43° wxIcon
Hi: 48° Lo: 37°
Feels Like: 36°
Corvallis
Cloudy
43° wxIcon
Hi: 47° Lo: 35°
Feels Like: 36°
Roseburg
Cloudy
42° wxIcon
Hi: 51° Lo: 35°
Feels Like: 38°
North Bend
Cloudy
46° wxIcon
Hi: 49° Lo: 36°
Feels Like: 42°
KEZI Radar
KEZI Temperatures
KEZI Planner

LATEST FORECAST

Community Events