Cleveland-Cliffs CEO says surge in domestic auto manufacturing is imminent
"In this country, we have eight finishing facilities ready to go. We are ready for the surge that we're going to have in automotive," Goncalves said. "And that's right now — not in two years, not in three years, not in five years. It's right now."
Cleveland-Cliffs, which is one of the largest steel producers in the U.S., saw its stock begin to climb two months ago, after President Donald Trump announced he would double tariffs on foreign steel from 25% to 50%. According to Goncalves, Trump is "creating the foundation for a rebirth of manufacturing, particularly automotive."
The company posted a better-than-expected quarter Monday morning, which sent shares up. By close, the stock had gained 12.45% and continued to rise in extended trading.
Goncalves was critical of the Federal Reserve and its decision not to cut interest rates. He suggested that lower interest rates are necessary to boost the housing market, which he indicated is related to the auto market. He said he doesn't want a poor housing market to "start contaminating the automotive market" at a time when domestic production could heat up.
Goncalves said auto manufacturing would be the main driver of his company's earnings growth.
"The more we produce cars in the United States, the more we will be able to produce steel," he said. "Because you supply them, and with higher production, we dilute our fixed costs, our costs go down, our margins increase, and that's where my earnings power is."
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