President-elect Donald Trump's vow to levy a 25% tariff on "all" goods from Mexico and Canada could prove disastrous for the U.S. auto industry, analysts say — and that's why industry executives are highlighting whatever comparative advantage they can muster to manage the threat.

Ford Motor Co. highlights its top production volumes in the United States already. Stellantis NV has capacity available in U.S. plants in case it needs to move production from its neighbors. Meanwhile, General Motors Co. says it'll take a cautious approach to making any significant changes in hopes of waiting out what could be a temporary situation.

Some speculate Trump's comments are a negotiating tactic around immigration and fentanyl and are unlikely to take shape at least for a long period of time. Still, even short-term, experts warn such an approach could be damaging for the Michigan economy as well as automakers, their dealers, suppliers and autoworkers.

"The real goal here is drugs and immigration, not so much protecting autos," said David Whiston, an analyst at financial services firm Morningstar Inc. "He'd be hurting these companies for the near term. I don't think anyone benefits. It's about who gets hurt the least."

Such duties — and the potential for retaliatory tariffs — could increase the cost and the price of vehicles, jeopardizing profits and production volumes. No vehicle from major brands is completely built with only parts originating from the United States. Parts and fully assembled vehicles from Mexico and Canada could be subject to such a broad trade policy — and vehicles built in other countries like Japan, South Korea or European nations may be unaffected.

Ford employs more hourly workers and builds more vehicles in the United States than any other carmaker. Traditionally, that has cost the Dearborn, Michigan, automaker $1 billion more than its crosstown rivals, but if 25% tariffs were to take effect, its footprint could offer it more protection from the impact, John Lawler, chief financial officer and vice chair, said last month.

"When we talk about some of our cost disadvantage versus competition, that's part of it," he said at the Barclays Global Auto & Mobility Tech Conference, "but maybe that becomes a positive going forward."

Investors seemed to think so, too. The day after Trump vowed to impose the tariff, GM shares closed down 5% at $54.79, and Stellantis' stock on the New York Stock Exchange was down 2.5% at $12.61. Ford's fell less than 1% at $11.10.

At Ford, almost 78% of its North American production volume last year came from the United States, representing almost 1.9 million vehicles, according to AutoForecast Solutions LLC. Nearly 16% of vehicles were built in Mexico and 6.6% in Canada. Not all of those vehicles will go on to be sold in the United States, though in March, Ford said more than 79% of the models it sells in the United States are assembled here.

The automaker this year announced plans for overflow production of its Super Duty trucks from Kentucky Truck Assembly Plant to go to the Oakville Assembly Plant in Ontario starting in 2026. A Ford spokesperson said the company didn't have anything to add about those plans.

The more than 1.7 million vehicles GM built in the United States last year represented 67% of its North American production. Mexico produced 28% of its vehicles, and 5.5% came from Canada.

Stellantis last year built more than 1 million vehicles in the United States, accounting for 56% of North American production. Mexico represented almost 26%, and Canada was 18%.

Trump's remarks have executives already reconsidering plans. Following the announcement of the potential tariffs, Ram CEO Christine Feuell told Bloomberg the automaker is open to revising its manufacturing and supplier strategy. Stellantis Chief Financial Officer Doug Ostermann last week suggested the company, if needed, could shift Ram production from Mexico into Metro Detroit plants prepared to build those kinds of vehicles. He also noted capacity available at its idled Jeep plant in Belvidere, Illinois.

"We’ll adjust as needed," he said at the Goldman Sachs Industrials & Autos Week. "When I look at our footprint, we have available capacity in the United States that will allow us to adjust, if and when those types of tariffs come into place. It's not ideal for us, as it won't be for any of the automakers, but I think we have perhaps a more flexible footprint when I look at the United States and many of our competitors, and so we should be in a good position to adjust, if and when.”

Feuell in October confirmed plans to build Ram 1500 pickups at the automaker's Saltillo Truck Assembly Plant in Mexico, where it already builds heavy-duty trucks, as a "relief valve" for the Sterling Heights (Michigan) Assembly Plant when its capacity is overwhelmed.

The United Auto Workers had been seeking to have that allocation go to Warren (Michigan) Truck Assembly Plant, where the automaker ended Ram 1500 Classic production earlier this year, cutting 1,300 jobs there. It's still building the Wagoneer and Grand Wagoneer.

"It's been the talk of the plant ever since the election results came out," said Eric Graham, president of UAW Local 140 that represents workers at Warren Truck. "We still don’t have orders. It’s really bad. We really need that. It would pretty much save our plant."

The News left an inquiry about the proposed tariffs with an international UAW representative.

GM Chief Financial Officer Paul Jacobson last week, meanwhile, emphasized caution on burning capital for major investments like moving plants for policy that isn't long term. He noted the company is evaluating some less-intensive steps that can be leveraged. But he stressed the importance of avoiding a similar inefficiency like what's happened with the pullback on electric vehicles because demand isn't where the industry expected.

"The key in situations like this is just not to overreact," Jacobson said. "It's better to be a little bit patient. And if that means we have to incur some costs in the short run, that might be the better long-term solution."

North American auto manufacturing has been working under free trade since 1994, which has allowed it to develop a deep network throughout the three countries, Whiston said.

"You do need to be patient and hope politicians can eventually work something out so the status quo can remain," he said. "If it becomes clear it's here for the long run, then you do have to make changes at that point. I would be more concerned if they were immediately shutting down the Equinox and Blazer factories and building plants in Missouri or Ohio or whatever. It's not the best use of capital."

There likely will be a hold at least through the inauguration on North American auto investments, said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.

"Adding a tariff to virtually any country could cause relocation of parts and potentially raise prices and definitely raise cost," he said. "It takes a lot of money to open any plant, and earmarking that investment today could be more expensive in two months when a tariff comes in and changes your entire supply chain."

Some $403 billion worth of motor vehicles and parts entered the United States in 2023. More than half — 52% — came from Canada and Mexico, according to the U.S. Census Bureau.

That included about $83 billion in parts from Canada and Mexico. Cars.com this summer ranked the Tesla Model Y SUV as the most American-made vehicle, followed by the Honda Passport and Volkswagen ID.4 SUVs. The only vehicle in the top 10 from the Detroit automakers was the Jeep Gladiator midsize truck.

The National Highway Traffic Safety Administration publishes some content information in its annual American Automobile Labeling Act report, though it doesn't include all vehicles or show the percentage of content sourced from Mexico or other countries for all those included.

For model year 2024, the Hermosillo, Mexico-built Bronco Sport is Ford's vehicle listed with the highest Mexican content at 64% and 20% from the United States or Canada. The Ford Escape and Lincoln Corsair are its United States-built vehicles listed in the report with the highest Mexican content at 25%. Their content from the United States and Canada was 32% and 47%, respectively. The Mustang coupe had the highest content from the United States and Canada at 60%.

In the same report, the GMC Terrain and Chevrolet Equinox, which both have production in Mexico, have the top Mexican contribution for GM at 42%; parts origination from the United States and Canada was 20%. Several vehicles built in the United States have 36% content from Mexico: the Cadillac Escalade, Chevrolet Silverado, Chevy Suburban and Tahoe, GMC Sierra and GMC Yukon. The Ramos Arizpe, Mexico-built Chevrolet Blazer EV had the highest U.S. and Canada parts content at 62%. GM said it works with more than 10,200 suppliers in the United States and will spend $87 billion with them this year.

Stellantis vehicles weren't included in the report.

The Audi Q5 S line 45 and Q5 Sportback S line 45 are the vehicles with the top Mexican content in the report at 78%, but Detroit Three models remain some of the products in the market that are the most integrated across the borders with Canada and Mexico, said Marc Robinson, principal of consultancy MSR Strategy and a former GM internal consultant who was involved in labor negotiations.

"In some ways, it would be the exact reverse effect on the auto industry to what (Trump) intends," Robinson said regarding tariffs being a protectionist trade policy. "Imagine you are proposing 25% tariffs on most of the U.S. auto industry but not posing any additional tariffs on imports. Products from Germany and Japan and Korea suddenly have a huge advantage."

A more protectionist regime would be in the UAW's long-term interest, but this particular strategy would not, he said: "If it were sustained, which I don’t think it would be, it would hurt the transplants, but particularly the Detroit Three more than imports and actually reduce U.S. auto jobs."

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