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The chief executive of Mercedes-Benz has said Howard Lutnick suggested the German carmaker relocate its headquarters to the US in a move that he warned highlighted Europe’s battle with the US for investments.
Ola Källenius said he had met Lutnick in New York about a year ago before his appointment as Donald Trump’s US commerce secretary.
“[Lutnick] did a phenomenal job of presenting the good reasons why you should invest in the US: lower energy cost, simplified regulation, low taxes,” said Källenius on Thursday.
Källenius said he declined the offer to move the headquarters, but the aggressive move by the US to attract investment was “a signal to Europe and to Germany [to] look at your competition, how business-minded they are, how aware they are of how the investor thinks”.
“If you want capital to flow to Europe, you are actually in a competition too. We are in a competition,” he said, confirming earlier comments made to German media outlet The Pioneer.
German auto manufacturers have seen their profits squeezed by tariffs on exports to the US and the high costs of production in their domestic markets.
Many European companies have become frustrated by the rise in red tape proposed by Brussels. Some German carmakers have also been sceptical of EU plans to introduce local content rules, which could lead to higher costs. Such rules should not be implemented “in a crude way that could stifle growth, drive inflation and cut off trade”, said Källenius.
He added that Mercedes-Benz did not expect “a relief scenario in the foreseeable future on the tariffs” but that the carmaker would continue to invest in the US.
Volkswagen chief executive Oliver Blume told German newspaper Handelsblatt at the weekend that without lower tariffs, “a large additional investment is not financially feasible”.
Mercedes-Benz, which is celebrating 140 years since Carl Benz filed a patent for the first combustion-engine car, has factories in Alabama and South Carolina.
The US Department of Commerce was not immediately available for comment.
Additional reporting by Aime Williams in Washington