General Motors CEO says Trump’s border tax would be ‘problematic’ for auto industry

GM Arlington plant

On recent visits to Washington, Mary Barra has appeared alongside President Donald Trump at White House conference tables. On Tuesday, the General Motors chief executive was center stage.

In a 35-minute conversation at an Economic Club of Washington luncheon, Barra told an audience of area dignitaries that a tax on imported goods could be “problematic” for the auto industry if not implemented with the understanding that North American automobile production often crosses multiple borders and unwinding those processes would take time and investment.

That issue has been top of mind in the industry ever since Trump began ratcheting up criticism of companies that produce cars in Mexico and sell them in the United States.

Barra has been a frequent presence at the White House in the month-and-a-half since Trump took office. One of his economic advisers, Barra has been party to meetings with other auto industry leaders and business executives, but has largely remained mum on the specific policy objectives GM would like to see him implement.

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“We were able to really talk about some of the issues and challenges that our industry, our company is facing, especially as we look at changes that may occur in tax and trade and regulatory,” Barra told the audience Tuesday. “The administration and the president really listened, and it’s early days, but seemed to be action oriented.”

Automakers across the industry generally hope the president, who has pledged to curtail regulations, will ease vehicle fuel-efficiency standards, lower corporate income taxes, and avoid tariffs on goods produced in Mexico.

Barra, who has been the company’s chief executive since January 2014, made the remarks in an interview with Carlyle Group co-founder and philanthropist David Rubenstein. Among the executives in the audience were former GM CEO Dan Ackerman, CBS Chairman and President Les Moonves, and Marriott CEO Arne Sorenson, as well as Washington Mayor Muriel Bowser and ambassadors from Greece, Belgium and Lichtenstein.

The talk mostly shied away from politics.

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Like other automakers, GM is seeing its traditional business model of selling cars to consumers shift due to advancements in technology and changes in the way people live. For one, the company sees a future in which fewer people may own personal cars. That’s why GM has funneled $500 million into ride-hailing service Lyft last year and created its own car-sharing service, called Maven, Barra told the crowd.

Those services will be important to the future of self-driving technology, another area where GM and other automakers are investing heavily, she said. GM is already testing its own autonomous vehicles, including on Michigan’s snowy roads, and Barra expects they will first be introduced to customers as part of a ride-hailing fleet.

“It’s really quite astonishing to see what these cars can do,” said Barra, who told the audience she has ridden in the company’s self-driving cars in San Francisco. “We’re seeing progress on a weekly basis.”

In January, General Motors announced a $1 billion investment in U.S. manufacturing that would add or maintain roughly 7,000 jobs in as many years – most of them in finance and engineering roles.

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Barra, the first woman to lead a major U.S. automobile company, also fielded questions about her role as a woman in business. Research shows 80 percent of car-buying decisions are made or influenced by women, Barra said.

Is her being a woman business leader significant, Rubenstein wanted to know, and does she get tired of answering that question?

“If I can be a role model for other young girls to pursue engineering careers, or math and science, then that’s a good thing,” Barra said. “But it is a question that gets asked more than it should.”