Automakers consider extensions on auto rules under USMCA

The council, which represents the Detroit 3, is working closely with its members and the trade office to gather the required information, the former Missouri governor said.

General Motors has not submitted an alternative staging plan and did not comment last week on whether that could change, according to spokeswoman Jeannine Ginivan.

Ford Motor Co. did not comment on whether it is submitting a petition. Fiat Chrysler Automobiles declined to com- ment.

Still, several industry sources told Automotive News they expected a majority of automakers to submit plans because it gives them more time to comply with a major revision of the auto rules of origin.

“We are aware that some automakers are considering the submission of request for alternative staging,” said Jennifer Safavian of Here For America, a group representing several foreign automakers.

Safavian, the group’s first CEO, said the additional time potentially allows for a smoother transition for the automakers and their suppliers.

Kia Motors America plans on joining other automakers in submitting alternative staging plans, spokesman James Bell said in an email. Toyota Motor North America is also expected to submit plans, according to a person familiar with the matter.

If the vehicle models covered by an alternative staging period make up more than 10 percent of an automaker’s total vehicle production in North America, then the automaker must include additional details on investments and sourcing changes that will allow those vehicles to comply with USMCA’s rules of origin once the extended period expires.

“It’s a Herculean task,” Lou Longo, a partner and international consulting practice leader at Plante Moran, said of the process.

Vehicles that don’t meet the trade deal’s rules-of-origin requirements are subject to certain tariffs.

In the U.S., the duty rate is 2.5 percent on passenger vehicles and 25 percent on light trucks. Longo said a likely strategy is for automakers to determine which vehicle models are easier to bring into compliance and which ones will absorb the duty rate.

While the automakers have had some time to digest these big decisions, many of their suppliers could be playing compliance catch-up in coming weeks, Longo said: “This is going to potentially hit them right between the eyes.”

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