Historical Stock Chart
3 Monate : Von Feb 2017 bis Mai 2017
By William Mauldin
WASHINGTON -- General Motors Co. Chief Executive Mary Barra said Tuesday that tax proposals affecting imports could be "problematic" for the auto maker.
So far, there is little clarity on what Congress will do. House Republicans have proposed a so-called border adjustment -- taxing imports but not exports -- as part of a plan to cut the corporate tax rate. President Donald Trump hasn't backed or rejected that plan; he has talked about a "big border tax" targeted at companies that move jobs outside the U.S. and then ship products back in. Either plan could be damaging to GM.
Corporate executives across industries have been eyeing the tax debate nervously. Mr. Trump may discuss a tax overhaul later Tuesday during his first formal address to Congress.
Tax proposals, "if not done very thoughtfully, could be problematic," Ms. Barra said at the Economic Club of Washington. "It would take a period of time to make adjustments to that."
Mr. Trump discussed the tax plan with Ms. Barra and other executives earlier in February at a meeting of a business-advisory committee. "We had a very productive meeting," Ms. Barra said Tuesday.
"We support tax reform, but it's got to be done in a way that doesn't have unintended consequences," Ms. Barra said.
GM and other global manufacturers based in the U.S. are paying careful attention as Mr. Trump and lawmakers discuss a variety of policies that could reshape their business models. Mr. Trump has warned about broad tariffs against Mexico and other trading partners, special taxes that would target companies moving production offshore and an overhaul of the North American Free Trade Agreement, or Nafta.
Analysts say a border-adjusted tax could hurt GM more than other Detroit car makers because it brings in more products from Mexico, including the import of nearly 400,000 full-size pickups in 2016. The trucks account for the bulk of GM's global profits. Ford Motor Co. imports small cars from Mexico but makes its lucrative F-series pickups in the U.S.
GM also relies on parts made by its suppliers south of the border. Trump advisers have said they may change Nafta. rules that govern how much of a vehicle must be made in North American to qualify for duty-free trade across the borders with Mexico and Canada.
A border tax could change the calculus companies use when determining where to source components from around the world. Before any major changes are implemented, executives are looking to explain their reliance on international supply chains to U.S. officials and lawmakers and request a delay.
Such policy shifts can affect where a company assembles cars or other products and even what domestic and international businesses are worth owning.
GM has entered talks to sell its European business Opel to Peugeot, part of a process of shedding money-losing operations abroad. The French government holds a 14% stake in Peugeot, formally known as Groupe PSA SA.
Ms. Barra said Tuesday the companies are "exploring other opportunities to see if we can work together."
"We've done a lot to improve the business, but we're exploring opportunities," she said of Opel.
--Mike Colias and Richard Rubin contributed to this article.
Write to William Mauldin at email@example.com
(END) Dow Jones Newswires
February 28, 2017 17:07 ET (22:07 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.