Benzinga - by Shanthi Rexaline, Benzinga Editor.
As the debate over allowing Chinese automakers into the U.S. market intensifies, former Ford CEO Mark Fields voiced his opinion, advocating for a temporary restriction on their entry.
‘Unfair’ Playing Field: Fields in a CNBC interview argued that Chinese companies benefit from government incentives and grants, giving them an unfair advantage. Warren Buffett-backed BYD Co (OTC:BYDDF) (OTC:BYDDY), however, has refuted this.
Field compared this to China’s past strategies in other industries like aluminum and steel, highlighting the potential for significant economic impact in the auto industry.
“The U.S. should for a period of time, not for forever, but for a period, prevent these Chinese vehicles from coming into the marketplace,” he said.
“And so when you look at the advantages that they’ve had, combined with you know their playbook which China has used in the past, whether you look at aluminum or steel, the difference here is the economic impact of the auto industry is multiple times those other industries.”
Ultimately, Chinese automakers have to get the nod, Fields suggested. “And they’re going to have to because they compete with them globally. But I absolutely do believe for a period of time they should, because it’s unlevel playing field,” he said.
Temporary Measure Pitch: Fields proposed a temporary restriction on Chinese automakers to provide Western companies, particularly the “Detroit Big Three,” an opportunity to compete effectively.
He acknowledged the eventual need to face Chinese competition globally but believes a temporary measure is necessary due to the current imbalance.
Echoes of Broader Concerns: Fields’ comments align with the concerns voiced by the Alliance for American Manufacturing, which warned of potential “extinction-level events” for the U.S. auto industry if Chinese competition is unrestricted. They also highlight potential strategies like “backdoor entry” through investments in neighboring countries such as Mexico.
William Li, CEO of Chinese EV startup Nio, had previously slammed the protectionism of the U.S. toward its auto industry even as Tesla was accorded equal treatment in China.
The KraneShares Electric Vehicles and Future Mobility Index ETF (NYSE:KARS) ended Wednesday’s session down 0.62% at $22.34, according to Benzinga Pro data.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
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Photo via Ford Asia Pacific on Flickr
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