Ford moving all production of small cars from U.S. to Mexico

This announcement has produced a lot of criticism so I thought I might mention the reason for it.  The reason is that small car production is extremely competitive -- and becoming more so as China enters the market.  So Ford needs a cost saving to compete with the Asian manufacturers.  Otherwise sales of small Fords could nosedive, which would throw American workers out of work anyway.  And the benefit to the consumer of the move is a reduced price for their small car buy.

I agree that there can be social reasons why moving production may be undesirable but in this case no American workers will lose  work so I can't see any reasonable objection to the Ford move.  If Trump does put a tariff on imports from Mexico he will simply be giving the entire small car market to Asian producers, notably China.  Does he really want that?  Ford's profits will mainly go to America.  China's profits will go to China

Ford Motor said Wednesday it is shifting all of its U.S. small car production to Mexico, a development that drew fresh criticism from Republican presidential nominee Donald Trump.

Ford's declaration came as CEO Mark Fields sought to appeal to investors.

"Over the next two to three years, we will have migrated all of our small car production to Mexico and out of the United States,"   Fields told a meeting in Dearborn, Mich., where the company is based.

But the new development played perfectly for Trump, who was campaigning in Michigan, the traditional home to the nation's auto industry. As recently as April, he blasted Ford's plans to move production to Mexico as an "absolute disgrace." And on Wednesday, he picked up the beat again as he visited Flint, which has been hard hit by the loss of auto worker jobs.

"We shouldn’t allow it to happen. They’ll make their cars, they’ll employ thousands of people, not from this country, and they’ll sell their car across the border," Trump said. "When we send our jobs out of Michigan, we’re also sending our tax base."

In Michigan, Ford's announcement didn't come as a great surprise. Ford has said it continues to invest heavily in its U.S. plants and isn't cutting jobs here. Last fall, the automaker made a commitment to invest $9 billion in U.S. plants, with about half going to 11 facilities in Michigan. The deal created or retained more than 8,500 jobs as part of a new four-year contract with the United Auto Workers union, a net increase in the U.S.

Still, UAW President Dennis Williams has repeatedly blasted Ford and other automakers for investing so much money in Mexico.

"There is no reason, mathematically, to go ahead and run to countries like Mexico, Thailand and Taiwan," Williams said earlier this year. "We all recognize there is a huge problem in Mexico. So we have to address it as a nation. The UAW cannot do it alone. We are not naive."


1 comment:

  1. the fool on the hillSeptember 22, 2016 at 4:48 PM

    Trump seems mostly to be a focal point for an emotional reaction against the irrationality of the left. But an emotional reaction against irrationality is more irrationality. Both are irrational emotional conditions. Individually and collectively, emotions come in pairs, and one primes for the other. Truth and reason is in between the extremes and up at a right angle.

    I like Trump for only one reason. He is against political correctness. But even that must run its course so its lessons can be learned, and so that individual accountability can return to be managed better than before. All things turn in cycles as they progress forward at a different angle to their turning. Watch them and see.

    It is natural that industry goes to where capability exists and average wages and living standards are lowest. Trying to hold that back could be a mistake. Dams need their water released to let more water in. There has to be a flow. Wages are part of the cost of production, and naturally the selling price has to be higher than production cost. So a man who makes and sells a product, cannot afford to buy that product at his own price, at the frequency that he makes it. And when all is taken into account, neither can the people of a nation all afford to buy all the products that the nation makes. The only ways to maximise the affordability of things, is to have a level of the workforce unable to afford most things, so that others can afford most things. That can be done by (1) having a system of forced slavery like most nations have had in the past, or (2) a national socio-economic class system like England has had in the past, and as all nations continue to have to some degree now, or (3) by having an international socio-economic class system where some nations have an average wage and living standard less than others, as the world economy has now. For any and all economies to function there must be wealthy and poor. But it all works towards even, and in doing so, things turn over, so it never gets even, but keeps turning. For motion needs and makes unevenness, and unevenness needs and makes motion. Overall, products made move in the opposite direction to money flow. But that cannot last, for as the goods move overall towards those with the money, and the money flows overall to those making the goods, the average wage and living standard of the manufacturers rises towards being even with those of the buyers. For a nation's economy has an area, a volume, and a height, like a bucket of water does, and the height is the average wage and living standard within the economy. And like swirling water in a bucket, an economy has a degree of vitality, which is the rate of circulation of money within the economy. And when connected by any exchanges to another nation's economy of different height, the monetary flow is from the highest to the lowest economy. So the gradient between the economies gradually levels out. The aim is to increase the height of the lower economy without loosing too much height from the higher, so that they run together as high as possible. (Several actions help with that.) As the difference I height between the economies decreases, the downward flow of money slows and the upward movement of goods slows. Vitality slows, the movement of money within and between the economies slows, may even almost pause - see histories. Money is the means and incentive of getting things done, and the drive to get things done is part of the survival drive, so one way or another things will get done. Another producing and manufacturing class will manifest, be it a forced slave system, or a national or international class system. And so the socio-economic engine keeps turning over, seeking equilibrium but never getting there. And it all works out fair along the way, because as it turns it moves, and different places, peoples and nations have their times at the top and the bottom of the turnings.


All comments containing Chinese characters will not be published as I do not understand them