Toyota Stock Hits A Pothole After Trump Rebukes Japanese Automaker
... suffered a setback on Wall Street ...
Although Toyota sought to stem the damage from President-elect Donald Trump’s Thursday tweet denouncing the construction of a new plant in Mexico, the Japanese automaker suffered a setback on Wall Street.
Trump posted Thursday that Toyota would pay a hefty “border tax” if it didn’t build the plant in the United States.
Back in September, Toyota announced that it would spend $150 million at the Baja plant to boost output of its Tacoma pickup truck. The company has also said it seeks to invest $1 billion in a new Corolla plant at Guanajuato that would produce 200,000 vehicles per year for sales throughout North America. The plant would employ 2,000 people.
Trump’s fingers had barely stopped sending the tweet when Wall Street felt its impact.
My new favorite thing is watching the stock charts of companies immediately after Trump tweets, here’s Toyota. twitter.com/realDonaldTrum…
Toyota shares began plummeting almost instantly, causing an initial drop of around $1.2 billion in value.
The stock price finished the day down 0.75 points, or 0.62 percent.
Experts expect the stock price will rebound over time, as happened before to Boeing when Trump tweeted criticism over the cost of the new Air Force One.
Toyota later issued a statement insisting its Mexico plans would not hurt employment in the United States.
Statement in response to the President Elect's recent comment. Please visit toyota.us/2ig6QQ4 for more information
“Toyota has been part of the cultural fabric in the U.S. for nearly 60 years,” the statement read. “Production volume or employment in the U.S. will not decrease as a result of our new plant in Guanajuato, Mexico announced in April 2015,” it said in part of a statement released on Twitter.
Trump’s jab at Toyota followed a campaign promise that he would attack automakers that either invest or move jobs outside of America. Ford, which was the subject of many of Trump’s campaign comments, recently said it will not build a planned plant in Mexico. General Motors, which was criticized by Trump earlier this week for building the Chevrolet Cruze in Mexico while laying off Ohio workers, responded by saying that the model made in Mexico had minimal U.S. sales and that the layoffs were due to market factors in the U.S.
One expert said whether Trump wins or loses his battles with the auto giants, the fact that he is fighting them resonates politically with one key group.
“Trump’s attack tweets against different companies may seem pretty random, but look closer. When he calls out Carrier, Ford, GM, Lockheed-Martin, Boeing, etc., all of the companies he’s targeting have something in common: They’re either unionized companies or in generally unionized industries,” wrote Jake Novak on CNBC, who said Trump’s “protectionist and border security message, which became evident right from the first day he announced his campaign, clearly spoke to union rank-and-file members across the country.”
When Trump fights for union jobs, he increases his support among union members, undercutting a traditional base of the Democratic Party, Novak wrote.
“Expect this to continue throughout his presidency. And all it takes is a look at the election map to see why. Trump’s siphoning of union support from the Democrats brought him a narrow election victory, it’s only logical that he’ll do what it takes to siphon yet more to ensure more support and a bigger re-election margin in the coming years,” he added.
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