International Steel Mills

Voestalpine to Shift U.S. Auto Parts Production to Mexico

September 3, 2018

Austrian steelmaker Voestalpine will move part of U.S. automotive parts production to Mexico to avoid steel import tariffs.

Voestalpine has 48 U.S. sites that primarily use domestic steel but about one third of company revenue relies on plate and specialty imported steels that are not produced in the United States. U.S. production accounts for one tenth, or $1.5 billion, of Voelstalpine’s global revenue.

Despite filing over 3,000 exclusion requests with Commerce, only 37 have received responses, said CEO Wolfgang Eder. Two thirds of those 37 requests have been denied.

Trump’s tariffs on imports of aluminum and steel drove the decision to move partial production to Mexico, said Eder.

“If I have an empty hall in Mexico, which can be easily rented at any time, then I can install the machines needed for assembly fairly quickly,” Eder told Reuters.

The production shift is expected to be completed in the next few months. “Things are fluctuating too much,” said Eder.

Voestalpine produces parts for German carmakers and, despite potential auto tariffs, demand for cars like BMW, Daimler and Porsche remains strong in the U.S., said Eder. He added that the company has seen increasing interest from Chinese producers and Ford for Voestalpine parts.