Peter Cooper Explains the Risks of Chinese Vehicles in the U.S. Market

As debate over Chinese automakers entering the U.S. market intensifies, dealers are weighing the potential impact on affordability, competition, and national security. In this episode, Peter Cooper, President and CEO of Lexus of Lehigh Valley, shares why he believes the long-term risks of allowing Chinese-made vehicles into the U.S. outweigh the short-term benefits of lower prices.

Cooper discusses how government subsidies, tariffs, and global competition are reshaping the automotive industry while outlining the safeguards he believes should be in place before Chinese brands are allowed broader access to the American market. He also explains why dealers should pay close attention to ongoing legislative efforts and what the outcome could mean for the future of U.S. automotive retail.

Key discussion points:

• Why Cooper believes Chinese government subsidies create an uneven competitive landscape
• The potential impact of Chinese automakers on U.S. jobs and the dealership network
• Proposed guardrails for allowing Chinese vehicle imports
• The role tariffs play in offsetting state-backed pricing advantages
• Why Cooper believes congressional action is needed beyond executive orders
• How the debate could shape the future of automotive retail and manufacturing

Cooper offers his perspective on one of the industry's most closely watched policy debates and what dealers should be preparing for next.

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Transcript

Welcome And The China Shock

Jim Fitzpatrick 0:07

Welcome to Inside Automotive with Jim Fitzpatrick. What's happening in China continues to have a ripple effect on the U.S. economy, and the automotive industry is no exception. Joining us now is Peter Cooper, president and CEO of Lexus of Lehigh Valley in Pennsylvania. For I want to get his perspective on what they could mean for dealers going forward. I know that this is something that is near and dear to your heart, Peter. So let's kind of start in the beginning

Should Chinese Cars Enter US?

Jim Fitzpatrick 0:33

here. Should uh Chinese vehicles be allowed in to the U.S. to build a hell of a car for a lot less money?

Peter Cooper 0:39

Hard no. And I, you know, I you last time we spoke, you asked me what I consider being a dealer, and I thought about it. And it was very provocational to me. And I did a lot of research and looked into this uh situation and what it could create for our industry, for our country, and it's a hard no.

Jim Fitzpatrick 0:56

A hard no. And hard no. Okay, so so give me some of the high points as to why you came to a hard no.

Peter Cooper 1:03

Well, first of all, I mean, we've spoken before, our industry is a matured industry. And so we're 15 million give or take. So the Chinese coming in here are not going to create new jobs.

Jim Fitzpatrick 1:16

Okay.

Peter Cooper 1:16

They're just going to displace people throughout our industry and through the whole chain, whether it's in manufacturing, um, it's components of the car, it's dealerships, it's finance. They're just going to displace people. So they're not going to create any jobs.

Jim Fitzpatrick 1:30

When you say displace people, do you mean move them to the BYD factory or the BYD show? Correct.

Peter Cooper 1:36

I mean, metaphorically, Ford workers could shift to work at BYD. Okay. But we're not all of a sudden going to go from 15 million to 20 million vehicles.

Jim Fitzpatrick 1:45

Okay.

Peter Cooper 1:46

So that's, you know, that's clearly.

Jim Fitzpatrick 1:48

Now some would say that that in the event that they were to come in and the tariffs were not not that heavy on the car, you might find that you'd pick up some of the used car buyer that's now spending $35,000 on a used car to go, wait a minute, I didn't know I could buy a brand new car for $40,000 and have this kind of technology and styling in a vehicle. I mean, do you think that that it might add to the new car account because it's stealing some of the used car cards?

Peter Cooper 2:16

I think there's a there's there's a possibility of that, but there's the con of that. So you just bought that used car for $35,000, and it's maybe your first or second biggest asset that you own, and we immediately say to it to all of these people who have tremendous debt, your your asset is toxic and it's worth half. So we're already saying to the American public, well, we don't we don't really care. And the whole notion of this affordability is really short-term and very short-lived because everywhere they have gone,

Subsidies And The Real Cost

Peter Cooper 2:48

they've subsidized it. So they they built the they built production currently for 55 million vehicles. Right. Last year they exported 10 million vehicles. They own 10% of the European market, 20 plus percent in Mexico. So they're shifting. And Mexico put 100% tariff on, they didn't raise prices, the Chinese government uh continues to subsidize it. So we're not asking for the auto manufacturers or the dealers to compete with other manufacturers, we're asking them to compete with the Chinese governments. And the Chinese, wherever they've gone, they haven't gone and said, okay, well let's just take a little taste of this and get out. They look for dominance. And they're not about to let these factories sit empty. Um so they have a problem. They've got to keep producing vehicles, they've got to get them into markets.

Jim Fitzpatrick 3:41

Sure. Sure. So do you think that that that the average uh American consumer says, nah, I'm not concerned about uh security. I'm not concerned about the the worker, the union worker that's in Detroit. I'm not concerned about any of that. The only thing I'm concerned with is my wallet and the quality, the best deal I can get on a vehicle. That's it.

Peter Cooper 4:04

I I think there's a tremendous truth to that.

Jim Fitzpatrick 4:06

Yeah.

Peter Cooper 4:06

And I think I think the consumers are deserving of that. It's how do we get there for the consumer. And I think traditionally, if we can look at our market and I just use the last people wanted to get into SUVs. Okay. The competition, free market competition dictated that that's how we would get into the market. People want big trucks, competition, free market competition dictated that. So if people want affordability, people who are already existing in this country, manufacturing, are gonna have to figure that out.

Jim Fitzpatrick 4:38

Yeah.

Peter Cooper 4:38

But not by keep competing by the Chinese government.

Jim Fitzpatrick 4:42

And and um as we've had a discussion prior to this, um, and and you probably know my view on this, and many people in the audience watching knows because I get the text messages, the emails, and the social media posts. But I say if we were to put strong guard rails on the Chinese vehicles coming into the US, AI um uh uh where you've got um you know a limit, uh first of all, an a limited number of vehicles that come in. 250, 300,000 vehicles a year from the Chinese, okay, whether it be BYD or other brands. Or in addition to that, they've got to be sold through a franchised franchise dealer network. We can't even get that done through Volkswagen and Scout. Um and then in addition to that, the Chinese have got to commit to either partnering or building a factory on U.S. soil. And then in addition to that, tariff the hell out of the car, if you wish, um, to make it more of a level playing field here in the U.S.

Peter Cooper 5:41

a lot

Guardrails For Dealers And Warranties

Peter Cooper 5:42

a lot of points just touched there. So I I think the tariff thing, 100% tariff in Mexico, Chinese government ate it. So we'll go to the we're gonna go to the Chinese manufacturers. There's currently 15 of them. So how do we decide who we're gonna get let into this country, if at all, which I don't think we should, but who you let in? So now you have these 15 manufacturers come for your 300,000 vehicles, they're all not gonna last. So now we have consumers who bought cars, they're gonna be stuck without warranties. What's gonna happen? So they still don't know who's gonna be their big three. And you're asking the dealers in in the consumers of this country, well, take the risk. Let's let's just do that makes sense. Yeah, it doesn't, it doesn't make sense. I mean, if you you remember your time we had the Yugo, we had all of these cars that came to this country, they were cheap trans, and it they went away.

Jim Fitzpatrick 6:34

Yeah.

Peter Cooper 6:35

Consumers got stuck with it.

Jim Fitzpatrick 6:37

Right.

Peter Cooper 6:37

So I think it's a problem.

Jim Fitzpatrick 6:39

But you think that is the same as as these brands that are all over the world, such as a BYD, which I think is the number one selling brand now, or at least right maybe number two or number three in the world. Do you think that car company is going away?

Peter Cooper 6:51

I mean, I don't know. Again, it's not it's not going to go away as long as its partner is the the Chinese government. It's not going to go away.

Jim Fitzpatrick 7:00

Right.

Peter Cooper 7:00

You know, they they went from um exporting in 2020 a million vehicles.

Jim Fitzpatrick 7:06

Yeah.

Peter Cooper 7:06

To last year they exported 10 million.

Jim Fitzpatrick 7:09

Right.

Peter Cooper 7:09

In six years.

Jim Fitzpatrick 7:10

Right.

Peter Cooper 7:11

Okay. So the speed with which they're gaining momentum, China does not enter a market just to sell 350,000 cars.

Jim Fitzpatrick 7:18

No, of course not. Yeah.

Peter Cooper 7:20

Right. And and so the so the threats are real. Trevor Burrus, Jr.

Jim Fitzpatrick 7:23

But the but the Chinese shouldn't be in control of what we allow in, even though they would like to sell 30 million vehicles in the U.S. That's up to our government. Jim much the way we saw uh in the early 80s, late 70s, early 80s with Toyota, Nissan, uh, Honda, Subaru, they too had caps on them and they couldn't sell as many as they wanted to. I remember selling Toyotas in the early 80s, we couldn't get enough of the cars. We we had uh a showroom full of customers who said, sorry, the allocation is already up. There's no there's no more vehicles coming into the U.S.

Peter Cooper 7:55

And to that point, when they were coming, they were also building Lousy Prop. And the domestics had a chance to I mean, it's not compared to what it is. But there was product, they had to keep refining the product and making it better, making it better, making it better.

Jim Fitzpatrick 8:09

Sure.

Peter Cooper 8:09

As as so did the domestics. Domestics, some they did, some they didn't, but we let the marketplace, the free market. We didn't do a deal with the Japanese government, we didn't do a deal with the Korean government, we did a deal with companies. Yeah. This is not this is not the case.

Jim Fitzpatrick 8:25

Right. To the consumer, though, to the consumer out there, do they care about that? Do or do they just say look at the government? They should let me finish. Let me finish. A free market is a free market. If that uh government wants to subsidize it, whether it be uh Norway with Volvos or whether it be Ferraris in Italian, you know, the Italian government says, hey, we're gonna bring down the price. Is uh do we go, oh, whoa, whoa, wait a minute. That that's gonna that's gonna save the consumers in in America a whole lot of money, and that's not fair.

Peter Cooper 8:56

I think your point is really well taken. The consumers are are screaming or saying we want affordable transportation.

Jim Fitzpatrick 9:03

Sure.

Peter Cooper 9:04

That's based upon and and they should get it.

Jim Fitzpatrick 9:07

Yeah.

Peter Cooper 9:07

But it's not at the expense of who's here and what we've done and letting in a multina look letting in a govern another government which poses every kind of risk to our government that there is. I mean, you and I spoke before uh we got on the air.

Jim Fitzpatrick 9:22

Right. And you gave me some interesting facts, and I'd really like you to share them again about because it's really important to I've said this before that the that the you know the the the history with America and China on the automotive front has been very rich. Okay, and I mentioned to you that in the last 20 years, and anybody can Google this or go to Chat GPT, and the question was how many how many uh GM vehicles have been sold in China in the last 20 years? For the I'll save you the trip. It's over 50 million vehicles. 50 million, okay? Ford had another five and a half million. So the the the relationship on the automotive front between China and between the U.S. has been a very, very uh healthy one. Now all of a sudden China's got a vehicle that goes, great, we'd like to ship to the U.S. not so fast. Your company is owned by the Chinese government. It's an incredibly way better vehicle than what we're building. Not my words, this is the president of Ford, way better vehicle than what we are building here for a lot less money with technology that blows the socks off of what we're delivering currently. And we're saying we're um What happened? What happened? What's that?

Peter Cooper 10:33

What happened to General Motors in their sales in China?

Jim Fitzpatrick 10:36

Oh my god, they've dropped substantially because we we typically we we literally showed the Chinese how to build a good car, and they said, Oh, you think that's a good car? Wait till you see the car we're gonna build with the same information that you just gave us on how to do this with assembly lines and workers and so they decided they they decided they wanted global domination in the automotive space.

Peter Cooper 10:59

It's five by the way, it's five percent of our GDP. It's it's a huge number. Huge number.

Jim Fitzpatrick 11:04

But let me ask you this. So so if you look at all of the other products across the landscape that we do enjoy a very low cost of here in the U.S. because they're manufactured and built and shipped here from China, i.e., the the cell phone. Okay, the the iPhone rather. So everybody's got an iPhone, it's your computer, it's everything pictures, it's videos. What the Chinese have availability to is amazing because of this phone with 300 million people walking around with them. And uh so we've always benefited from a very low-cost provider in the Chinese. It seems as though now that it comes time for the automobile, everybody's up in arms and goes, whoa, whoa, whoa, whoa. Not not the car, not the car manufacturer.

Peter Cooper 11:48

So let's but but let's just take a look at these 20 years. I was hoping you would speak about something else, but I know that in my lifetime, when I checked, the Chinese have not fired a missile anywhere

Security Leverage And Bipartisan Limits

Peter Cooper 12:00

in the world.

Jim Fitzpatrick 12:00

Right. It's exactly right.

Peter Cooper 12:02

Yet they've created economic dominance. Yes. They're not looking to be participatory, they're looking to dominate. And this this space is so massive. They're not looking to come here, Jim, to sell 300,000 vehicles a year. They're looking to come here and dominate. By the way, they offered a magnificent proposition to the continent of Africa. We're going to build you infrastructure, we're going to build you telecommunication, just give us your mineral rights.

Jim Fitzpatrick 12:27

Yeah.

Peter Cooper 12:28

I suggest to say it's not Africa.

Jim Fitzpatrick 12:31

Just give us your mineral rights.

Peter Cooper 12:35

So, in all of these decisions, they are short-term decisions and not long-term-term decisions. If we look at who we're dealing with, they have shown themselves time and time again who they are. Oh, by the way, with the technology, we're a little pissed off today. Let's just shut down all the cars in Boston in an instant. And I think the risk that we are running is that we've been really fortunate in the last two administrations, by executive order, they have made these illegal. The president of China is going to come here in uh September. He's not coming here with his hand out. He's coming to extend his hand. And he's going to try and extend his hand through saying, oh, we can do this for you. Yeah. By the way, Toyota, without the premier of uh Japan coming, they just now says they're going to spend three billion on another factory in Texas.

Jim Fitzpatrick 13:31

Yeah.

Peter Cooper 13:31

So we don't need the deal for manufacturing. And oh, by the way, people talk about manufacturing, I'm really uh I'm really disappointed in this. Everybody says, this is great, we need this. I don't know of a soul whose child has gotten a job in these new manufacturing jobs. Okay, I don't know. And you interview a lot of people, so maybe maybe you come across more people than I do. So this is something that is, you know, it's it's it's talking points, they sound good, and by the way, they really appear. We do want jobs in America, right? We do want affordability, but it's really risky. So there's legislation bipartisan in the Senate and in the House to make codify codify this and make it into law. And it's really important that we do that.

Jim Fitzpatrick 14:16

You got a president, though, that is completely open-minded about the prospect of allowing the Chinese vehicles to come in. What do you say, what do you say to President Trump on this? Well, I guess you already have right now. Your position is don't let him in. But here's a here's a guy that's But that's his position.

Peter Cooper 14:31

He's it's his position also. He signed an executive order to to continue what Biden put in place. So the only thing that's going to change his position is the con the talking point for today. And I mean for today, that we're going to build a plant here, we've got more jobs and it's affordable.

Jim Fitzpatrick 14:50

That's right.

Peter Cooper 14:50

That's it's it's only for today.

Jim Fitzpatrick 14:53

That's right.

Peter Cooper 14:54

And then you open those gates and there's no there's no closing.

Jim Fitzpatrick 14:58

Right.

Peter Cooper 14:59

And and and I think the risks, and we talk about the LIDAR and all of the technology, it's very risky. Oh, by the way, once we do this and they create a dominus, tell me what we're going to negotiate with them and what's the leverage we will have with them in the future. Every time we negotiate a deal like this, it's massive, and they're going to control an industry, we give up any type of leverage that there is for any type of negotiation.

Jim Fitzpatrick 15:23

So I think it's really I'm not sure I understand the the connection between the leverage.

Peter Cooper 15:27

Because the more industry they take over in this country, the only if you go to what we talked about before, the only place that we can negotiate with them is economically.

Jim Fitzpatrick 15:36

Yeah.

Peter Cooper 15:37

We're not going to go to war with them.

Jim Fitzpatrick 15:38

Right.

Peter Cooper 15:38

We're not going to start launching a missile. We saw that like everywhere, how that's a failure right now.

Jim Fitzpatrick 15:43

Yeah.

Peter Cooper 15:43

So we're going to do it economically. And the more advantage that we can give to them economically, we're weak to buy. I mean, we went and built all these plants in China.

Jim Fitzpatrick 15:52

Right.

Peter Cooper 15:53

Thanks. By the way, dealers built a bunch of of these franchises in England. Some of them failed, and the government said, no, no, we're going to take this back, we're doing ourselves. Never mind a dealer.

Jim Fitzpatrick 16:04

Which, by the way, you know what's amazing to me, Peter, is the fact that Buick was the number one selling domestic, or, you know, the number one selling uh American car in China. Buick. For you Buick dealers, hold your text messages or whatever. But you know, not not the number one selling car in the U.S.

Peter Cooper 16:24

I I think if dealers get if dealers get really honest about this, and for the sake of this conversation, they're gonna open up 300, maybe. What it's gonna do to our country, what's gonna do our industry, the juice is not it's not worth the squeeze at all.

Jim Fitzpatrick 16:39

So you think that if there were guardrails and we said 300,000 vehicles, that's gonna get obliterated and it's gonna be it's gonna end up being more than that because our government would allow more than that somewhere along the line.

Peter Cooper 16:52

Of course. And why would they want to come here if they know it's gonna be No, no, no, but it's not but what I'm saying is it's not up to them.

Jim Fitzpatrick 16:57

But it's up to what our government says is gonna be an acceptable number to manage our economy and our and our manufacturing in Detroit and other places to say, no, no, no, you're you're good at 300. That's what we agreed to. You're saying we don't have the capability to say no to them?

Peter Cooper 17:14

Oh, absolutely we don't have the capability. Tell me one bit of law, legislation that's passed in this this administration. So it's all by executive order. So we've got to be really careful and know what the limits currently are of our government. So I just and I don't want to make this thing become political because it is, it's not, it's it's not the sides of the aisle. Yeah. It's just nothing about it that's healthy. And somebody builds a plant wherever it is and it builds that market, and you can say it's New Mexico. And everybody said, No, no, just look what it did for us. It can do this for you. It all that it is, we will not mature this market into 10% more or less.

Jim Fitzpatrick 17:50

Yeah.

Peter Cooper 17:50

And what happens when they own, by the way, let's have what happens when they get their share of that market? Like I say, oh, we're fine, we're going home.

Jim Fitzpatrick 17:56

Yeah.

Peter Cooper 17:56

We're going to shutter our plants, we're not going to continue trying try and grow our economy. So I just think it's, you know, it's very myopic, it's very short-sighted.

Making Affordable Cars Without China

Jim Fitzpatrick 18:04

How do we get uh, you know, and uh the answer to this too, and I know that the government subsidizes what they're what they're building in China, but how do we get the OEMs thinking or to the table to go look, fifty thousand dollars for an average price of a vehicle for the for average family out there, for any family out there is fifty thousand dollars. But when you think about the average family now getting hit on every single front, whether it be interest rates, home ownership, which is now just incredible, $400,000 plus for an average price of a home, now the average age is 40 years old before the person sees their first home. I mean, the these all of these economic indicators are are disastrous. And at what point in time, spar starting with cars, does Detroit come to the table and go, okay, we gotta figure this out. We can't continue to sell $50,000 cars because where is it in five years? It's fifty-five thousand. Whereas in ten years, it's sixty thousand. Okay, where is this going? We're gonna have a Toyota Corolla for a hundred grand pretty soon if we don't watch out.

Peter Cooper 19:06

Well, again, I think I think I think we're we're missing out on the ingenuity of of these great companies. I agree. The market if people aren't buying our cars, there's only one or two things. They're gonna have to sub or they're going to have to figure out how to build and manufacture a cheaper car.

Jim Fitzpatrick 19:22

Right.

Peter Cooper 19:23

And the truth is uh manufacturers got in the crossover business, and everybody got in it, but the marketplace dictated and created a shift.

Jim Fitzpatrick 19:33

Yeah.

Peter Cooper 19:33

So so we need to create that shift, but we need to let the marketplace take care of it. And the marketplace being our country, not a foreign government, especially the magnitude of China.

Jim Fitzpatrick 19:44

Yeah, yeah. So you and you're right.

Peter Cooper 19:47

I mean, we're you're you're absolutely right, but the competition needs to do that. And by the way, Toyota got into it for it, says we need to go at it and everybody needs to build better, and the competition created that. So I think you know, the fact that Jim Farley's says it's a great vehicle, he's driving it for a reason. He wants to say, how do we can figure out that we can do this?

Jim Fitzpatrick 20:05

Right. And lo and behold, he's working on it, like to your point earlier, he's walk working on a $30,000 EV pickup truck, you know, that suddenly, all of a sudden, we can build an EV pickup truck for $30,000, which is amazing. We couldn't do that in the in the last uh 10 years. But I think him driving this vehicle, you know, this this BYD or whatever whichever one it is, um, has has opened up his eyes to go, look, I think personally, I think it's inevitable that they're gonna hit America with these vehicles. Okay, you got a president that's kind of floundering on this, he can't wait to stick the shovel in the ground with the golden, you know, the golden shovel to go, hey, we broke ground, we're bringing in these jobs. I mean, you talk to Trump about jobs and growth and economics and everything else, and man, he that's a great photo op for him, he thinks. And granted, he's only gonna be president for another couple of years, you know, regardless of what side of the aisle you're on, he's only gonna be president for another couple of years. I don't know that he really cares long term about what happens after that, but man, that looks good if he can say just brought 20,000 manufacturing jobs into the U.S. from China.

Peter Cooper 21:13

No, no, I think I think I think exactly what you said. It is a photo op.

Jim Fitzpatrick 21:17

Right.

Peter Cooper 21:17

But we we gotta still move beyond that. And he's gonna say, great, we can s you know, we can still enact legislation after that. So I think it's a photo op, I think it's affordability. Yeah, you know, and and and you're not gonna stop him from wanting the photo op, whether you go World Cup, whatever you want to do, he's looking for a photo op.

Jim Fitzpatrick 21:34

That's right.

Peter Cooper 21:34

Okay. So that's who he's gonna be. We're not gonna stop that. Right. You just got but we've got to look at long-term what's what's really healthy here. And I think again, we we talk about it, and people say it's going to take time for these wonderful manufacturing jobs that he said are coming. Well, I just told you what six years looks like to the Chinese government. Okay, and and there's just no way any com any company in this country, you know, in this country, this country is struggling. To compete with China.

Jim Fitzpatrick 22:01

Yeah.

Peter Cooper 22:01

And we're gonna you were gonna ask Ford to compete with the Chinese government. I don't think it's gonna work so well.

Jim Fitzpatrick 22:07

It's kind of like when you when you look at it in um you know how many if you remember all of the American companies that built color TVs here in the US, RCA and Zenith and so many others. And now Philco Ford. It was Philco Ford. There you go. Yeah, yeah. So those these are all the TVs we grew up on. You're way, way older than I am, but it's it doesn't really no, I'm kidding. But uh but at the end of the day, these were great American brands that you know you when you go in to buy a TV, you don't ask for a zenith or an RCA, do you? You know, you want a Toshiba or you want a Sony or one of the others.

Peter Cooper 22:42

In every one of those examples, we dealt with foreign competition, not foreign governments.

Jim Fitzpatrick 22:47

Yeah.

Peter Cooper 22:48

And that's the big delineation here.

Jim Fitzpatrick 22:50

Yeah, that's it.

Peter Cooper 22:52

So Yeah.

Jim Fitzpatrick 22:53

You know, the Chinese own um the General Electric Appliance Division. They own the whole deal. So when you buy a General Electric appliance, you're buying it from the Chinese. So General Electric, here's an American company, you know. The Plaza Hotel owned by the Chinese.

Peter Cooper 23:12

Is there any is there any question that right now the United States and China are competing for global economic dominance?

Jim Fitzpatrick 23:20

Yeah. I mean they know. There's no there's no there's no yeah.

Peter Cooper 23:23

Okay. And and and and we're doing it through this, uh through our military, through this industrial this military industrial complex. They're doing it just very smartly. For them, 20 years means nothing.

Jim Fitzpatrick 23:36

Right.

Peter Cooper 23:37

Right? They'll starve their people for 10 years, they really don't care. And that's and and and that and that's where we're very, very vulnerable. Right. And it's it's it's a tremendous threat, and I think we're being really short-sighted.

Jim Fitzpatrick 23:50

Yeah. So you're in favor, you so do you just think we need to pay the American worker on the front lines of these car companies a lot less money. Is that what I'm hearing?

Peter Cooper 23:59

No, I that's not at all what I'm saying. I'm saying the main these manufacturers need to figure out how to do it more efficiently, I agree. More economically.

Jim Fitzpatrick 24:08

I agree. It it is and it's by the way, it's a very serious issue. I make light of it a lot of times because I'm I get in arguments, but at the end of the day, I I think it's something everybody's got to watch for sure. I've I've spoken to Senator Bernie Moreno on this. He's championing this bill along with uh Senator Slotkin out of Michigan. Uh lo and behold, two major states for manu auto manufacturing plants, Ohio and Michigan. Uh so I completely understand where they're coming from on this. Um and uh and yeah, it's it's certainly something that we gotta watch. If in the event that these vehicles are allowed in, I'm a complete proponent of clamping down on how many vehicles can come in. And then, like I said, make sure that they get a commitment to build a factory and then make sure that they're sold through franchise dealers, not direct to consumers, and uh and then tariff the hell out of them if you have to. Even if you got to put a 200% tariff on them.

Peter Cooper 25:02

Go ahead and it doesn't matter if you put the 200% tariff on it, because the Chinese government's gonna pay it. So to that point, and the manufacturing plants are only going to be assembly plants. They're not gonna be able to build all the componentry here, the electronics here.

Jim Fitzpatrick 25:18

Yeah, we saw that in the Japanese, too.

Peter Cooper 25:20

Right, exactly. So there's but they keep saying time and time again, we are showing you who we are.

Jim Fitzpatrick 25:25

Yeah.

Peter Cooper 25:26

The only problem is, you don't want to believe it, Jim. They're showing you.

Jim Fitzpatrick 25:31

All right, I believe it. I believe it. I'm a believer. I am a believer. And by the way, I don't want this dumb phone anyway. I'd rather one of these Motorola. Let's go back to Motorola. That's a good isn't that an American company, Motorola? Remember our.

Peter Cooper 25:46

I guess when you tell me general General Electric's all Chinese, I don't know what's American or not, what's not.

Jim Fitzpatrick 25:51

Well, that's go on, go on. I I would challenge anybody, not challenge you, but I'd recommend go on to chat and then type in what American brands are owned by the Chinese, and then what American products are or what products are sold by the Chinese in the and I mean it's a long, long list.

Peter Cooper 26:10

Long list.

Jim Fitzpatrick 26:11

Some of them are technology, some of them uh you know serve the military, uh, you know, the military, some of them serve big um big business that serve the military.

Peter Cooper 26:22

So it's you think of all of that, right? You think of all that, and it happens to be true. What is our ability to negotiate or have parity with a government that has this much economic dominance?

Jim Fitzpatrick 26:36

Yeah.

Peter Cooper 26:37

Okay, the only thing is what we're gonna build missiles at a million bucks apiece. That's gonna give us dominance. So I think we've we've got to face the realities of where we are. How do we slow the tide to make good, healthy decisions instead of I got a headline here, I got more jobs. Because by the way, I want you, because all the people you interview, give somebody my number, please, that tells me they know somebody who got one of these new manufacturing jobs.

Jim Fitzpatrick 27:02

So I'm not so sure. You're traveling in those circles, though.

Peter Cooper 27:06

I mean, you do, and I, you know, I'm just waiting. So I think all of these projects are.

Jim Fitzpatrick 27:11

I don't know that I do either. I mean, you're you're talking about, you know, just a different area of the country, maybe a different economic group. I don't know.

Peter Cooper 27:19

But look, look, Eli.

Jim Fitzpatrick 27:21

I also don't know anybody that works on the lines in uh and any auto manufacturing company. I don't know anybody that does that.

Peter Cooper 27:27

On the current situation Eli Lilly is building $3.6 billion uh plants six miles from us. Okay, wow. There will be there will be jobs there.

Jim Fitzpatrick 27:39

Oh, yeah, besides the Chinese national government. Right.

Peter Cooper 27:43

You know, Toyota building an engine plant or a new plant here, there'll be jobs here, by the way, because there is a commitment long term to the internet.

Jim Fitzpatrick 27:51

Now we're in Georgia and we do have you know Kia. I do know people that work at Kia, and I do know people that work at you know Hyundai and and what have you. I know people that work in the South Carolina BMW uh plant, uh do very, very well. Great company. You know, they do they do phenomenal. So yeah, there are there are people that now that I think about it, there are people that I know that work at be more jobs coming.

Peter Cooper 28:14

You can talk to the people. But I think we're really concerned, and it, you know, there's a divide in this country that's unhealthy. But what's the long-term perspective, you know, irrespective of where you come down? The fact that we have tremendous bipartisan support for this really says it all. Yeah. The fact that this started with a Democratic, president, Republican, there's validity to this. And it's really important that we just don't take that temptation of let's get a piece of candy today that's you know that's gonna turn rancid in six months.

Jim Fitzpatrick 28:46

Well, and you know, depending on on how you look at it, the you know, those those lobbyists for the uh Detroit three, and everybody else for that matter, because listen, Hyundai doesn't want them coming in either. Toyota doesn't want them coming in. You know, this has been a golden market for all those companies, Kia, Nissan, Honda, Hyundai, you name it, they don't want the Chinese coming in either. So now you got all of those companies and those CEOs and those board of directors, you know, that end up uh circuling circling the president in his Oval Office there, um, whether it be Biden or Trump, going, hey, don't let this happen. And there's big dollars. There's big dollars there, as you know. I mean, if you want to get President Trump's attention, make a big donation. And and guess what? Did it work? Did it work for you? I'm just curious. Did it work for me? No, it didn't work for me. Darn it. Damn, you would think a thousand dollars would go a lot further than than it does. But what are you gonna do?

Peter Cooper 29:41

You know, again, I I appreciate you you you being on the front of these issues, um, and and the clarity we're you're trying to get out there.

Jim Fitzpatrick 29:49

Um I think this is Yeah, it it's at least it stirs the the conversation and the thinking. You know, I think everybody needs to think about this because you bring up good points. I think I bring up a couple of good points too. And but I do think it needs to be under the microscope, and it we we really need to proceed with caution, even if you were to let cars in, like I said, or or not let them in. You got we got to proceed with level head, level-headed with caution uh on this particular topic. Because I I agree with you, if done wrong, it really could decimate the industry as we know it, for sure. Well, I do agree with you on that.

Peter Cooper 30:26

I think a question to our point is look globally where it's been done right that it's worked with the Chinese and automotive, and you can't point to anywhere.

Jim Fitzpatrick 30:35

Yeah.

Peter Cooper 30:36

So to say, okay, we should do it, where the rest of the world is failing at this, is really not a strategy that I'm it might be too early to tell on the Canadian situation.

Jim Fitzpatrick 30:45

They're letting 49,000 vehicles in,

Tariffs Assembly Plants And Job Reality

Jim Fitzpatrick 30:48

and that's it right now. Um, and they're building dealers as we speak, they're building dealerships, you know, and they're all excited up there with because they only want to go to Canada for a hundred thousand cars a year. Yeah. Okay.

Peter Cooper 31:01

If you believe you say so. I just don't see where it's worked and why we should why we should say, okay, yeah, let's take a risk with us.

Jim Fitzpatrick 31:12

Why did the Canadians let the let them in?

Peter Cooper 31:15

I can't figure out why the Americans do it, dude. I can't figure out what they're doing.

Jim Fitzpatrick 31:18

Yeah.

Peter Cooper 31:19

So um, I don't I I don't I don't know. Can't figure out what my kids do it. Can't figure out what my kids do half the time, you know?

Jim Fitzpatrick 31:26

All I want to know is is the straight open yet? Are we getting are we is it open? Is it not open? How are we bringing down these gas prices?

Peter Cooper 31:33

Because again, again, it's um it's headlines.

Jim Fitzpatrick 31:37

Yeah.

Peter Cooper 31:38

You know, it it's headlines. We could argue a good deal about it. We I I'll I'll I'll close with this, and I don't know if I said you you've been a car dealer, I've been a car dealer. My suspicions are you've made a ton of deals in your life. You've done them with your media company.

Jim Fitzpatrick 31:51

Yeah.

Peter Cooper 31:52

Okay. Four things. They're tremendous successes. They're moderate successes, they're moderate losers, or they're big failures.

Jim Fitzpatrick 32:00

That's right.

Peter Cooper 32:01

And it's gonna happen in all of them. So for anybody to say, oh, this is a good deal or it's a bad deal, every deal you made when you made it, you thought it was a good deal.

Jim Fitzpatrick 32:11

That's right. That's a good point. Until it's not.

Peter Cooper 32:15

Time will tell. The fact that everybody thinks the deals we're making are great, I'm not in a position. Also, when you made a deal, you use the information you had in front of you at that time.

Jim Fitzpatrick 32:23

Yeah.

Peter Cooper 32:24

To compare it to somebody else who made a decision at a different point in time with different information serves no purpose. Right. Serves no purpose.

Jim Fitzpatrick 32:32

Right.

Peter Cooper 32:32

So I think everybody, you know, again, is this a good deal or bad deal? I don't know. I do know, based upon history, letting the Chinese come into this market is is catastrophic.

Jim Fitzpatrick 32:45

Yeah.

Peter Cooper 32:46

Because they they've showed what they're gonna do.

Jim Fitzpatrick 32:48

I'm gonna learn. I'm gonna give you the last word on that.

Peter Cooper 32:51

So that that's the one thing about history is we don't learn from it. So they're showing you who they are.

Jim Fitzpatrick 32:56

That's right.

Peter Cooper 32:57

They're showing you who they are. And I think we gotta be really, really mindful of it.

Jim Fitzpatrick 33:02

That's right. Peter Cooper, president CEO of uh BYD of Lehigh Valley. I mean, I'm sorry, Lexus of Lehigh Valley. Oh look at who doesn't want to be a Lexus dealer? You know what I mean? So you're very, very fortunate.

Peter Cooper 33:19

So yeah, I I never I never want to under underplay great parts.

Jim Fitzpatrick 33:24

We don't even know if you the rest of us in the industry don't even know if you know what the car business is like as a Lexus dealer.

Peter Cooper 33:33

Well, I think part of the problem is if we know what the car business is like, right, and just see how the public is continuing to get bludgeoned. Yes, you know, for for dealers to squeak out, you know, a couple extra few hundred dollars. I mean, you

Final Warnings And Your Comments

Peter Cooper 33:46

just had your conference in DC.

Jim Fitzpatrick 33:47

Yeah.

Peter Cooper 33:48

That didn't happen because dealers were behaving properly.

Jim Fitzpatrick 33:50

No, that's right. Good point. Very good point.

Peter Cooper 33:52

So I think we've got to really be mindful of that, and the consumers' desire to tolerate that is less and less.

Jim Fitzpatrick 33:59

Yeah.

Peter Cooper 34:00

And again, you go to the workers and you go to somebody who's on the Ford assembly line and they see what their chairman's getting paid. That disparity, boy, doesn't feel really good to those.

Jim Fitzpatrick 34:10

I know. I know.

Peter Cooper 34:12

So we gotta be really mindful.

Jim Fitzpatrick 34:13

You sounding more like a socialist, Peter Cooper.

Peter Cooper 34:15

I mean, you go to No, God forbid.

Jim Fitzpatrick 34:18

That's a whole nother show. I don't get me starting. All right, man. Thank you so much. I appreciate your uh candid, uh candid uh viewpoints on this and willingness to share them on our airwaves. And uh I I know this is gonna get a lot of uh comments on social media, which I welcome. You know, we want to know what you guys think out there. So uh Peter brings up a lot of really good points. So thank you so much for the show.

Peter Cooper 34:45

Jim, keep up the keep up the great work. Really the industry needs you. Thank you. So thank you.

Jim Fitzpatrick 34:49

Happy to be here. Thanks.

Peter Cooper 34:50

All right, thanks.

Jim Fitzpatrick 34:56

Thanks for watching Inside Automotive with Jim Fitzpatrick.