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Auto Executives Go to Washington; Boeing Culls Shadow Factories By Paul Berger

Automakers are taking their case against tariffs to Washington.

Ford Motor CEO Jim Farley and GM CEO Mary Barra have visited administration officials to warn that tariffs will make it harder to catch up with ascendant Chinese carmakers.

The WSJ's Mike Colias and Brian Schwartz report that the autos executives join other industry leaders jostling for face time with the White House to plead their agendas with President Trump.

The administration's trade policies have rattled an auto industry that is heavily reliant on imports for its manufacturing operations.

Proposed tariffs of 25% on Canada and Mexico due to take effect March 4 threaten to pinch already thin profit margins, and executives fear cuts to electric-vehicle subsidies could exacerbate losses.

Auto executives from small-parts makers to big manufacturers are game-planning responses depending on how and when the tariffs are implemented. Ford has teams devoted to analyzing the potential fallout and drawing up triage plans throughout its supply chain.

A separate 25% tariff on steel and aluminum imports is likely to inflate costs if the duties take effect as scheduled in March, executives say. Farley warned that even speculation of tariffs can raise supply chain costs.

The Trump administration's tariff plans could shave $20 billion off U.K. economic output over the next two years. (Bloomberg) CONTENT FROM: PENSKE Gain AI. Gain Ground with Penske.

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Manufacturing

Boeing is getting its jet production business back on schedule by fixing fewer aircraft. Company executives plan to ramp up 737 production by eliminating shadow factories where planes are fixed or updated instead of built. The WSJ's Sharon Terlep writes that the shadow factories can occupy some of the company's most experienced workers and have contributed to severe delays delivering new aircraft to customers .

Boeing burned through $14 billion last year. It built far fewer planes, first because of quality problems that slowed its production lines, then when a machinist strike stopped work for about two months. Repair work requires sophisticated care and reworking, which means some of the company's most skilled machinists are charged with fixing jets rather than with building new planes. Boeing aims to close the shadow factories by midyear and to soon start pumping out 38 of its 737 MAX jets a month.

A Bombardier regional jet flipped over after landing in snow in Toronto. (WSJ) Quotable Number of the Day In Other News

U.S. industrial production rose 0.5% in January. (MarketWatch)

U.S. retail sales fell more than expected in January. (WSJ)

The eurozone economy grew 0.1% in the final quarter of last year. (WSJ)

Singapore projected national economic growth will slow this year amid global trade concerns . (WSJ)

Eleven people died in Kentucky as heavy rain and wind washed out roads and left thousands without power. (WSJ)

Intel rivals Taiwan Semiconductor Manufacturing and Broadcom are eyeing deals that would break the American chip-maker in two. (WSJ)

Birkin bag maker Hermes reported higher sales for the final quarter of 2024 boosted by a strong performance in the Americas . (WSJ)

The European Union is preparing new sanctions aimed at limiting Russia's shadow fleet that transports illicit oil. (WSJ)

China criticized Canada for sending a warship through the Taiwan Strait. (South China Morning Post)

The Trump administration approved a port off the coast of Texas capable of exporting 1 million barrels of oil a day. (Marine Log)

Shipping industry officials are pushing back against the growing use of biofuels. (Splash 247)

The Environmental Protection Agency started a process that could reverse California emissions regulations for heavy-duty trucks. (Commercial Carrier Journal)

The Bureau of Industry and Security paused reviews of new export license applications . (Export Compliance Daily)

Robotics startup Figure AI is in talks to raise $1.5 billion in funding that would value the company at $39.5 billion . (Reuters)

Amazon workers in North Carolina voted against unionizing . $(NPR.AU)$

About Us

Follow the WSJ Logistics Report team: @bylizyoung and @pdberger . Follow the WSJ Logistics Report on X at @WSJLogistics .

This article is a text version of a Wall Street Journal newsletter published earlier today.

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February 18, 2025 07:04 ET (12:04 GMT)

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