Multinational automakers will need to rethink their global operations under an "America First" presidency, with prospects of a border tax and protectionism signaling change for the industry, former Chrysler CEO Bob Nardelli told CNBC on Tuesday.
"For example, my experience with Chrysler, do you move the Chrysler 300, do you move the mini van, do you move the Dodge products out of Canada and back to the U.S.?" Nardelli asked on "Squawk on the Street," speaking just after Trump met with three auto industry leaders.
While the decision may be easy to make, the execution is far more challenging, Nardelli said.
"We're talking about multibillion dollars of [retrofitting] some abandoned factories that we had to go through during the financial meltdown in '07, '08 and '09," the former Home Depot CEO said.
"Think globally and act locally" was the expression Nardelli used to describe the way leaders in the auto industry should act when reconciling President Donald Trump's calls for bringing manufacturing back to the United States with the realities of the global supply chain.
"It's not only the finished product, but it's the componentry that goes into these cars with the cross-border traffic, back and forth, until you get a finished car," the former Home Depot CEO said.
If the president's insistence pays off, Nardelli said automakers could decide to localize both car and component production to the United States. But the former auto chief wondered whether U.S. manufacturers possess the technology, time and fiscal power to get it done.
"I think the industry has done a fabulous job at trying to increase quality, improve reliability [and] provide more confidence in the consumer relative to making such a big investment," Nardelli said. "Let's hope that it does not have to add cost."