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BorgWarner Inc.

World Headquarters 3850 Hamlin Road Tel: +1 248-754-
Auburn Hills 0422
Michigan 48326,
USA

June 29, 2018

VIA REGULATIONS.GOV PUBLIC DOCUMENT

Hon. Wilbur L. Ross, Jr.
Secretary of Commerce
Attention: Section 232 Automobile and
Automotive Parts Imports Investigation
U.S. Department of Commerce
14th and Constitution Avenue, NW
Washington, D.C. 20230

Re: Notice of Request for Public Comments and Public Hearing on Section 232 National Security Investigation
of Imports of Automobiles, Including Cars, SUVs, Vans and Light Trucks, and Automotive Parts; Docket No.
DOC-2018-0002

Dear Secretary Ross:

BorgWarner is a global product leader in clean and efficient technology solutions for combustion, hybrid
and electric vehicles. With manufacturing and technical facilities in 68 locations in 17 countries, we employ
approximately 29,000 people worldwide. BorgWarner has evolved from a powertrain supplier to a
propulsion company that is playing a major role in creating our vision of a clean, energy-efficient world.

Our company’s origins date back to the 1880s in the United States (U.S.) and we have grown to a $9.8 billion
publicly-traded company today. BorgWarner’s growth in the last century is the result of the expansion of new
markets due to public policies that supported international trade. As an American company headquartered in
the U.S., we employ over 6,300 people in 16 manufacturing and technical centers in eight states across the
U.S. Our company uses a local-for-local supply chain strategy and we source regionally when it is
possible. In the U.S. we have a 65% supplier localization rate. Annually, BorgWarner locations from
around the world purchase over $1 billion of direct materials from 700 U.S.-based suppliers.
Additionally, with our main R&D center for the U.S. in Auburn Hills, Michigan and four others in the states of
Michigan, Indiana, North Carolina, and New York, BorgWarner Inc. currently holds over 60% of our intellectual
property in the U.S.

BorgWarner recognizes the intent and spirit of Section 232, but we have serious concerns that these
actions will disrupt the industry and negatively impact the U.S. economy.

Imposing tariffs on automobiles and automotive parts would negatively impact U.S. jobs and
economy: The proposed changes could cause instability to the extremely complex global supply chain,
make U.S. companies less competitive in the international market, and increase the price of goods sold to
U.S. consumers. The potential tariffs could also result in consumers delaying or choosing not to purchase
new vehicles, which would decrease sales and production, and therefore decrease manufacturing jobs,
R&D, and capital investments. As a result, the U.S could experience potential reductions in research,
development, and jobs for skilled workers in the cutting-edge technologies in the mobility industry.

Imposing tariffs could also negatively impact our company’s U.S. locations. Future business opportunities
could be directly impacted by the price increases caused by new tariffs:

1. If BorgWarner requests our customers to absorb the increased cost due to a new tariff, our
customers could request that we move production of these technologies to another BorgWarner
facility outside of the U.S., which could decrease our U.S. manufacturing employment level.
2. Alternatively, our customers could choose another non-U.S.-based supplier who may have a
pricing advantage over our location within the U.S. This option would also negatively impact our
current U.S. employment level.
3. If BorgWarner directly absorbs the cost of increased tariffs, our profitability could be damaged,
which would hurt our ability to invest in our technologies, facilities, and workforce training and
development.

The automotive industry has been an instrumental force in fueling our nation’s economic recovery and
therefore, does not pose a threat to national security. The industry continues to contribute significantly to
the U.S. economy today:

 The automotive manufacturing sector is a $953 billion industry that historically represented 3 -
3.5% of our nation’s GDP.”i
 After an unprecedented seven-year growth period, 2017 was the fourth-best sales year in the U.S. with
17.1 million light vehicles sold.i
 The industry employs over 7 million people in the U.S. or 3.8% of all private sector jobs.i
 The low U.S. unemployment rate, 3.8% in May 2018, reflects the strong economy. The U.S.
unemployment rate for manufacturing is even lower at 3.3%.ii
 BorgWarner is one of many motor vehicle parts manufacturers that together make up a critical sector
of the US economy. Motor vehicle parts manufacturers directly employ more than 871,000 Americans -
up 19 percent in the last five years.iii

BorgWarner supports fair trade agreements that enhance collaboration and improve competitiveness.
The growth and success of the automotive industry has been possible because motor vehicle parts suppliers
operate in an integrated, complex global supply chain. Access to worldwide markets is critical for the motor
vehicle parts industry to remain competitive. The automotive industry is and has been a global industry. Its
global growth is due to international customer demands and the business model of manufacturing in the places
where customers are located in. BorgWarner supplies to every major global automaker. We grew our ability to
manufacture in other parts of the world to be close to our customers in those regional markets. Close proximity
enables suppliers like us to collaborate more effectively with automakers to ensure efficiency, quality, and cost
savings in engineering, manufacturing, and delivery.

BorgWarner urges the Trump Administration to reconsider these recent actions and pursue
alternative ways to forge more positive trade relationships with our trade partners to foster fair
competition in the global marketplace.

Thank you for your consideration.

Sincerely,

Erika Nielsen
Director, Global Government Affairs
BorgWarner Inc.
enielsen@borgwarner.com
Tel: 248-754-0422

i
Alliance of Automobile Manufacturers, 21 June 2018, autoalliance.org
ii
U.S. Department of Labor, Bureau of Labor statistics, June 25, 2018. data.bls.gov
iii
Motor & Equipment Manufacturers Association, 21, June 2018. mema.org