Bullseye American Ingenuity Fund portfolio supervisor Adam Johnson breaks down President Donald Trump’s tariff plans and evaluates financial knowledge from the week on ‘Maria Bartiromo’s Wall Road.’
The CEO of Mercedes-Benz on Thursday signaled the corporate plans to speculate extra within the U.S. within the coming years and in addition mentioned how tariffs may impression the automaker’s enterprise.
Mercedes-Benz CEO Ola Källenius stated on a name with reporters after the corporate introduced its quarterly earnings outcomes that the corporate has “been operating in the United States for more than 120 years” and has “invested tens of billions of dollars into the United States.”
“We have two large operations on the passenger car side, one in Alabama and one in South Carolina,” Källenius stated. “Directly, we employ more than 11,000 people in the United States. If you would count in all the suppliers and the ones that kind of are dependent on those final assembly jobs, the usual calculation is roughly 1-to-10, so another 100,000 jobs are associated with those plants. Our dealer partners, strong private investors around the country, employ 28,000 people and then again, they have a residual effect. “
“The several hundred thousand jobs, tax revenue, etc. is the Mercedes-Benz footprint in the U.S.,” he defined. “What’s the point I am making? The point is we’re also an American company. Yes, we have our headquarters in Germany and our European origins, but we feel American.”
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Mercedes-Benz CEO Ola Källenius stated the corporate is opening to growing its investments within the U.S. (ANDREW CABALLERO-REYNOLDS/AFP through Getty Photos / Getty Photos)
Källenius famous that Mercedes-Benz has analysis and improvement actions in Silicon Valley in addition to a presence in Michigan. He additionally indicated that the corporate plans to extend its funding into the U.S. to broaden that footprint going ahead.
Ticker Safety Final Change Change % MBGYY MERCEDES-BENZ GROUP AG 15.5863 -0.26
-1.66%
“What’s the road ahead? We are prepared to continue to invest billions and we want to grow our footprint in the United States. We are committed,” he stated. “A little known fact – we are one of the major industrial exporters out of the United States. Two-thirds of the vehicles that we make in our Tuscaloosa plant actually go out into the world, a significant part of them obviously to Europe.”
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Källenius stated Mercedes-Benz is aware of how coverage modifications may impression its money flows and, in flip, its funding alternatives. (AFP / Getty Photos)
Given Mercedes-Benz’s international presence, Källenius stated that modifications in tariffs or different points of commerce coverage may impression its funding selections over the long-term. President Donald Trump signaled yesterday that he’s planning to impose 25% tariffs on imported cars.
“So shifts in trade policy in either direction, of course, is very important to us,” he defined. “When we make investment decisions about new models, as you rightly point out, you cannot move a plant over the weekend from one continent to another. Those are longer-term commitments, it takes two to three, maybe even four years to make those types of adjustments. And our supply network literally includes all five continents of the world, so it’s very, very sophisticated. It is more than a supply chain, I would call it more of a supply network.”
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Mercedes-Benz CEO Ola Källenius stated that zeroing out auto tariffs between the U.S. and European Union would spur funding. (Artur Widak/NurPhoto through Getty Photos / Getty Photos)
Källenius additionally stated that “trade policy can affect our business model” and that whereas policymakers will finally decide what comes of commerce negotiations, a reciprocal transfer to decrease tariffs and even no tariffs between the U.S. and European Union (EU) would spur funding.
“In the case of the EU, actually the tariff is larger going into the EU than into the United States at the moment, and somebody mentioned why not take it down to zero-zero and make the playing field level and maybe spur growth, which would encourage companies like us to invest even more,” he defined. “If they come up with solutions like that, that would, of course, be fantastic.”
“I’m not going to speculate on what the result will be of the negotiation. All I can say is Mercedes-Benz is committed to the United States,” he added.
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“We have to produce positive cash flows to fuel our investments. And financial strength equals innovation strength, equals return to the shareholder,” Källenius stated. “We’re very mindful of things that could negatively influence our business model and reduce our cash flow. So if we’re operating in an environment as a strong member of the U.S. industrial family, we hope that will be taken into account, and there is nothing stopping us from upping the ante and investment more in the United States.”
