2017 looks great for GM, Ford and Fiat-Chrysler—even with Trump on their case

At this year’s Detroit auto show, everybody wanted to know how incoming president Donald Trump was likely to disrupt the car business in 2017. Auto executives preferred to talk about profits—because there’s a lot to talk about.

General Motors (GM) just boosted its guidance for profitability in 2017 to as high as $6.50 per share, a healthy 8% bump over the firm’s expected EPS for 2016. GM also said it will buy back an additional $5 billion in stock, for a total of $14 billion in buybacks since 2015. GM stock jumped on the news and is up 24% during the last year, more than the overall stock market.

Fiat-Chrysler (FCAU), parent of the Fiat, Chrysler Dodge, Jeep an Ram brands, can’t build enough Jeeps to meet global demand. It just announced expanded production of existing Jeep models along with a forthcoming Jeep pickup and a new Wagoneer. The company will invest $1 billion in Ohio and Michigan to build the new vehicles, which earned a tweet plaudit from Trump. Fiat-Chrysler stock has soared of late, up 65% in the last three months.

Ford (F) has underperformed its crosstown rivals recently, due to a costly recall and higher-than-expected expenses for a freshening of the F-150 pickup. But analysts still expect a $7.3 billion profit for 2015, according to S&P Capital IQ, which would be comparable to the prior year’s healthy numbers. Ford stock has been flat during the last year, but it’s up 12% since Trump’s surprise win in November.

Trump has hassled Ford, GM and Toyota (TM) for building cars in Mexico, leading some to worry that Trump could declare war on the whole industry. It would be particularly problematic if Trump pulled the United States out of the North American Free Trade Agreement, as he has threatened to do, since automakers have invested many billions of dollars south of the border during the last decade, taking advantage of NAFTA’s free-trade provisions.

But investors seem to be betting that Trump’s policies could benefit the automakers on the whole, rather than punishing them. Analyst Adam Jonas of Morgan Stanley points out that Fiat-Chrysler would be a huge beneficiary if Trump relaxes fuel-economy rules, which could fit with his promise to roll back regulations on business. Fiat-Chrysler is more dependent on large vehicles with weak fuel economy than most other automakers, which has been considered a vulnerability that has depressed the share price. But it could become an asset if suddenly automakers don’t need as many high-mileage compacts or costly new technologies such as electric vehicles.

Ford CEO Mark Fields has said repeatedly that his company would be quite pleased to see a cut in the corporate income tax, as Trump has promised. That could make it considerably cheaper to manufacture in the United States and give automakers an incentive to build more products here instead of overseas. Another proposal under consideration by Congressional Republicans, a border-adjusted tax, could further lower taxes on automakers while giving them an incentive to build more cars in America for export, which in theory might create more jobs.

There’s also the chance Trump will throw the auto industry into mayhem by imposing new taxes on cars imported from Mexico and other low-cost countries. But Trump has proved to be a willing negotiator so far. After criticizing Ford for months, for instance, he praised the company for a new investment in Michigan it probably would have made no matter what. He was also happy with Ford’s plan to cancel the construction of a new plant in Mexico, which Ford also might have done regardless, because demand has evaporated for the small cars it planned to build there. Trump has proven he can be appeased, and the automakers are getting better at turning Trump to their own advantage. The future might be brighter for Detroit than Trump’s tweets suggest.

Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman.