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GM's Composure Contrasts With Suppliers Fretting Over Nafta

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  • Parts makers ‘should be nervous,’ Denso executive says
  • General Motors ‘well suited to react,’ Barra tells analysts

President Trump Reiterates Threat to Leave Nafta

Ask auto industry executives how much they’re sweating over Nafta, and parts suppliers give much bleaker answers than America’s largest car manufacturer.

Car components makers “should be nervous,” Bill Foy, senior vice president of Denso Corp., a major supplier of powertrains and automated driving systems, said Wednesday. North America’s biggest auto supplier Magna International Inc. warned last week the loss of a functional trade pact would be “lose-lose-lose.” Shiloh Industries Inc., whose parts cut weight and ride noise from vehicles, said it has spent six months preparing a contingency plan for Mexico in case it needs to shift production.

“I’m optimistic that something good will come out of it,” Ramzi Hermiz, Shiloh’s chief executive officer, said Wednesday at KPMG’s automotive forum in Detroit. Nonetheless, “I’m preparing for a change, and I think companies have to evaluate what that is.”

General Motors Co. Chief Executive Officer Mary Barra came off more sanguine. Yes, there could be unintended consequences from changes made to the trade pact between the U.S., Mexico and Canada, she told analysts. Autos account for about one fifth of total cross-border trade between the three countries, making it one of the most at-risk industries. But car companies have the ear of President Donald Trump’s negotiators, she said.

“We think we’ve had very constructive dialogue with the administration to understand that there could be unintended consequences from changes made that would directly impact jobs in the U.S., and we think there’s a good understanding there,” Barra said Tuesday at a Deutsche Bank conference in Detroit. “I’m pretty constructive that there will be modernization and there will be some changes” that GM is “very well suited to react to.”

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