Trump tariffs name on the US automobile manufacturing. Right here is the explanation why that is difficult

The Electric F-150 flash of the Ford Motor Company on the production line in your Rouge Electric Vehicle Center in Dearborn, Michigan, on September 8, 2022.

Jeff Kowalsky | AFP | Getty pictures

Detroit -When President Donald Trump pointed out to an exhaustion of 25% car tariffs last week, he suggested that car manufacturers would give it more time to move or increase the US vehicle production and parts.

“You need a little time because you will do them here,” said Trump on April 14th. “But you need a little time, so I talk about things like that.”

While Automotive executives and experts agree that more time would be helpful, an expansion of the US production is not so easy.

On the one hand, an additional 25% auto parts tariff should be effective by May 3, which would increase the costs of a vehicle, even if it is more imported and imported in the states.

And for another “” moving “car manufacturers and suppliers do not simply plant, as some politicians have demanded. The move of production management requires years of planning and construction – and can be expensive.

The actual construction of an assembly plant must be carried out in conjunction with setting workers, the building infrastructure such as water and energy supplies and the formation of a parts supply chain. This is according to the determination, purchasing and potential changes to the zoning by location.

Such institutions, such as a new 16 million square meter system of Hyundai engine In Georgia, thousands of hectares can require land and contain millions of square foot factory space.

“All of these things have to be set up,” said Doug Betts, a veteran of the auto industry, the president of the automotive department of JD Power. “It's a very, very complicated process.”

For a new work alone, six to 12 months can take. According to Collin Shaw, President of the Mema Original Equipment Suppliers Association, another 12 to 18 months, if not more, can take to build the system, followed by another year or more in the tool and increase of production.

The main variety of plants that Trump is supposed to build in the USA are large, billions of monillions of assembly plants whose years of construction last. In complete assembly plants, thousands of employees deal and are more like manufacturing cities that consist of body shops, paint systems, stamps and other support facilities.

Even smaller supplier systems that may be able to mobilize faster could still take years and, according to industry managers and experts, are often built near larger systems.

Autocores in the Smyrna Vehicle Assembly of Nissan in Tennessee, June 6, 2022.

Michael Wayland / CNBC

“I am convinced that the localization is the way, but the localization of new models that were built elsewhere in the world Nissan America told CNBC. “Nissan is very quick, but there will be no question of months. It's about years.”

Meunier said that the car manufacturer aims to “maximum” production in its largest American production facility in the middle of Trump's tariffs, even though he refused to specify a schedule for it.

This week, six of the best political groups represented by the US automotive industry have uncharacteristic armed forces to lobby the Trump administration against the implementation of the upcoming tariffs for auto parts.

“President Trump has given an openness to check the 25 percent tariffs of the administration for imported automotive parts -similar to the recently approved tariff easier for consumer electronics and semiconductors. That would be a positive development and a welcome relief,” says the letter.

New plants

The fastest way to increase US production is to use existing facilities for which the supply chains have already been determined, as Nissan intends to do.

The more expensive option is to build a new assembly plant that can take time, but offers a tip effect for the municipality, since the suppliers are working to locate the production of certain parts and components.

Every direct task created in vehicle production supported by a report by the Alliance for Automotive Innovation Trade Group on average 10.5 additional American jobs.

The most recent new automotive meeting in the USA is Hyundai's “metaplant” in Georgia.

The 12.6 billion dollar project, which Trump advertised as a success for American production, took about two and a half years to build. This does not include the continued increase in production and an undisclosed period for location selection, approval and other processes.

In view of the investment and size of the work, the time frame of Hyundai was relatively quick, which expected 300,000 vehicles annually and expected employment of 8,500 jobs up to 2031.

“If you build a brand new, you will quickly become a flash to do it in two years and you have to do everything. It is more likely in the four -year area,” said Mark Wakefield, partner and global automotive market manager at the Advisory Firma Alixpartners.

Jeep parent SternantisFiat Chrysler used to take over a similar construction timer of 2.5 years and gave 1.6 billion US dollars for the conversion of two drive train systems from 2019 to 2021 into Detroits first “new” assembly work for almost 30 years.

There are unique cases of car manufacturers who, in a figurative sense, move mountains and spend billions of dollars to do things faster. An anomal case was outside the USA Tesla Plant in China. The facility with the support of Chinese official was reportedly built in 2019 in less than a year.

Quick actions

There are only ways to build completely new facilities and gives ways to increase US production much faster and less costs. Especially when the product is manufactured in more than one place and the car manufacturer or supplier has additional, non -used capacity.

Many car manufacturers like General MotorsUse several plants to make your products with the highest volume. The Detroit car manufacturer produces its light Chevrolet Silverado in plants in Canada, Mexico and the USA

The day when Trump's 25% tariffs for imported vehicles came into force, GM said that it would increase the production of pickup trucks in full size in its assembly plant near Fort Wayne, Indiana, and hundreds of temporary employees. Such a step is essentially low -hanging fruits for a company.

Car manufacturers protect the production of their most profitable vehicles as far as possible. In the past, this meant output billions of dollars for a change of plant or even the double production of older and newer models of the same vehicles.

Moving quickly can have its disadvantages. Ford 2019 Losing as little production as possible from his Ford Explorer SUV, Ford spent 1 billion US dollars to completely convert his body business and to make other improvements in the sole Illinois facility that the vehicle produces.

The entire process for Ford lasted for 30 days, but the start of the vehicle was incorrect and cost the company billions for callbacks and corrections. At that time, Ford called it “one of the most complex renovation work in the history of the company”.

“It is devastating not to be in production in a segment” Apple as well as Sternantis and other automobile manufacturers.

According to beds, most companies will carry out a “daisy chain” in which they expand another work for a new model and at the same time produce the old ones. It enables an easier transition, but companies must have the plant space and capital to reduce such a step.

Not to mention that automotive companies are certain that regulations or trading policies do not change in the course of the construction, which leads to unnecessary expenses of billions of dollars.

“It is not a flip of the switch,” said Swamy Kotagiri, CEO of Canada-based car suppliers Magna, last week during a meeting of Auto Press Association near Detroit. “We have to look at it from a pragmatic point of view. I don't see how you can simply absorb and move. It just sounds, but it's not that.”