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."