Jones Visits Mercedes-Benz, Deflects Comment on Possible Shift of Production to Asia

Mercedes-Benz U.S. International President and CEO Jason Hoff, left, talks with Sen. Doug Jones during a Friday tour of the company’s factory in Vance. (Source: Paul Daugherty, MBUSI.)

VANCE — Sen. Doug Jones, D-Alabama, has co-sponsored a bill along with a Republican colleague from Tennessee that would delay President Donald Trump’s proposed imposition of tariffs on vehicles and parts imported into the United States. But in a press conference held Friday morning at Mercedes-Benz’s factory complex near Tuscaloosa, Jones deflected comment on a report that the company may move some production from the Alabama plants to Asia because of tariffs already levied by China.

The report by Reuters quoted the head of Daimler, Mercedes-Benz’s parent company in Germany, saying the tariffs have forced the company to consider a shift overseas.

“I haven’t seen that … . I don’t think it would be appropriate for us to comment on this at one point,” Jones answered to a question from BirminghamWatch. “Remember, these tariffs aren’t in effect yet, not on the automobiles. We are hoping that, as this goes forward, we can ease that concern and ease that threat. Everybody is going to have to start to look to see how they can readjust if they go into effect. But we’re not there.”

Actually, tariffs have been in effect since July on the Vance-built Mercedes-Benz GLE sports utility vehicle on exports to China, according to the Reuters report.

Daimler Chief Executive Dieter Zetsche said in that story that the company might move GLE production from Vance to another facility in Beijing.

“Of course we look at when parameters change, and how one could react to this, and whether we can set ourselves up in a better way. We are thinking about such matters, but so far we have not come to a decision,” Zetsche said.

Such a move would be costly, Zetsche said, because of the way the GLE supplier network is set up in areas around Vance, Tuscaloosa and Birmingham.

Mercedes-Benz U.S. International President and CEO Jason Hoff, who appeared with Jones at the press conference, also didn’t address the Reuters report.

Jones toured the Mercedes Plant 1 Friday morning before his press conference. He was scheduled to tour the Hyundai factory near Montgomery later Friday, and then hold a town meeting Saturday afternoon at Hoover Metropolitan Stadium.

In the past two weeks, Jones has pushed a bill that he introduced along with Sen. Lamar Alexander, R-Tennessee, which would put the brakes on a plan by Trump to impose tariffs on imported vehicles and parts. Trump’s Commerce Department has begun what’s called a “Section 232 investigation,” which is based on a law that allows the department to see whether trade conditions are hurting national security. The investigation has prompted criticism from both Democrats and Republicans, but for different reasons. Foreign-based automakers with large manufacturing operations in the U.S. have said that the 25 percent tariffs would actually hurt American workers even more, like those in Vance and Montgomery.

According to a report by Investor’s Business Daily, Toyota said the tariffs would force a hike of $1,800 in its popular Camry, which is manufactured at a plant in Georgetown, Kentucky.

Bill to Put Brakes on Tariffs

The Automotive Jobs Act of 2018, the name of the bill co-sponsored by Jones and Alexander, would require the International Trade Commission to study how the auto industry would be affected before the tariffs could be imposed.

The proposed tariffs are part of a larger move by Trump to fight a growing inequity in America’s balance of trade with other countries. Much of that fight centers on tariffs announced by Trump against China, Canada, Mexico and the European Union on various products. Those tariffs have brought on announcements of opposing tariffs by those countries, which has brought on fears of a trade war. However, Trump and the president of the European Union announced earlier this week the elimination of tariffs on numerous products, including American-grown soybeans. It’s a move that Jones praised in his press conference.

“The president did a really good thing the other day with the European Union,” Jones said. “It’s a good step, but it’s only a small piece of the puzzle.”

The EU deal does not include vehicles or parts.

Since the Mercedes factory opened in 1997, Alabama has become a major player in automotive manufacturing, with the addition of the Hyundai facility and the Honda plant in Lincoln. That does not include the upcoming Mazda-Toyota joint facility near Huntsville.

According to the Alabama Department of Commerce, 40,000 workers were employed last year at more than 200 auto-related companies in Alabama.