A tweet can do a whole lot in recent times but to make a company lose $1.2bn in 2 hours is troubling. Read how Donald J. Trump’s tweet has caused Toyota to lose that.
Toyota shares plummeted within minutes of a negative tweet from the president-elect, causing the company to lose around $1.2 billion in value.
The car company tanked on the stock market within five minutes of Donald Trump vowing to stop the firm from moving to Baja California in Mexico, where it already has a plant.
Mr Trump was confused about the location of the new plant. Toyota had first announced plans for a new plant in Mexico in April 2015 – but in Guanajuato
Mr Trump was seemingly responding to comments made by Toyota Motor president Akio Toyoda at an auto industry event that the company was still forging ahead with plans to up production in Mexico.
“We will consider our option as we see what policies the incoming president adopts,” he said.
Honda president and CEO Takahiro Hachigo added: “We produce cars in Mexico for markets including North America and Europe and we have no immediate plan to change this.”
Mr Trump responded there was “no way” the move was going to happen.
“Build plant in US or pay big border tax!” he tweeted.
Mr Trump sent the tweet at 1.14pm ET, and within minutes the share price of the $200 billion market capitalisation company plummeted. Shortly before New York stock markets closed on Thursday, the share price had not recovered and were down from pre-tweet by 0.5 per cent.
The Baja California plant makes about 100,000 pickup trucks per year, but the company wants to raise this number to around 160,000. The proposed $1 billion plant in Guanajuato would shift production of the compact Corollas from Canada and make about 200,000 per year.
The drop in shares, which are likely to rebound after the immediate shock has worn off, is not the first time Mr Trump’s tweets have played havoc with company values.
Airplane manufacturer Boeing lost $1bn off its share value shortly after Mr Trump tweeted that the company’s government contract costs were “out of control” at $4 billion. A Boeing spokesman quickly refuted the claim, saying the contract to build the new Air Force One planes was only worth $170 million.
Mr Trump has been criticised within the last month for taking sole credit for “saving jobs” at air conditioner manufacturing firm Carrier, when he only saved around half the jobs from moving to Mexico. Chuck Jones, the trade union boss that represents the plant, said Mr Trump “lied his a** off” about saving 1,100 jobs.
He also claimed he had saved workers at car maker Ford from moving to Mexico, but Ford CEO Mark Fields said the firm had only planned to move one manufacturing line and the decision had to do with market conditions.
Mr Trump also targeted General Motors in January, tweeting that they would pay a “border tax” if they continued to import cars to the US from Mexico. General Motors only imports hatchback versions of the Cruze car from Mexico and makes the majority of its vehicles in Ohio.