Volvo's North American CEO, Anders Gustafsson, warned earlier this month that the tariffs could force the company to rethink plans to ramp up production and hire new workers at the South Carolina plant. A company statement issued this week confirmed that "trade issues may impact the pace of the expansion."
Volvo's global CEO, Håkan Samuelsson, went a step further, telling some reporters at the Los Angeles Auto Show on Thursday that Volvo is slowing the pace at which production is being ramped up in Charleston, a move that will also result in a slowdown in hiring, a company spokesman confirmed.
The factory started producing the S60 sedan and will add the next-generation XC90 sport utility vehicle in 2021. The initial, 1,500-man workforce was originally expected to grow to about 4,000 once up to full speed. But that now appears to be a figure in play.
"We … thought Charleston could build cars for China," Samuelsson told USA Today. "That will not work."
The big question, Gustafsson and other Volvo officials have told CNBC, is whether the trade war with China is a temporary matter or one that could drag on for some time. Volvo appears not to be taking chances and is now making plans to shift at least some of the production of the new Volvo S60 sedan to one of its two plants in China.
BMW is studying similar options, the company has confirmed, for some of the sport utility vehicles produced at its own South Carolina assembly plant. The plant has become "the highest value exporter of U.S.-made vehicles," North American CEO Bernhard Kuhnt said during a Los Angeles Auto Show presentation.
Ford has not said whether it will have to make cuts at any of its own U.S. plants producing vehicles like the Mustang that it had been exporting to China.