Ford will move its small car production out of the country in 2018

[thoughtone]

source: Daily Kos

Ford Focus and C-Max will no longer come off this assembly line in Wayne, Michigan.


The Ford Motor Company will move its production of C-Max and Focus small cars to an undesignated foreign nation in three years, the company announced Thursday. A likely new location is Mexico. Focus is already built at plants in China, Argentina, Germany, Russia, Thailand, Taiwan and Vietnam. Germany has a C-Max factory.

Ford currently manufactures those automobiles at its plant in Wayne, Michigan, where it employs some 4,400 workers. The company began laying off 700 workers at the Wayne plant in June:

The company's decision sets a potentially combative tone just days before contract talks are scheduled to begin and runs counter to Ford's normal approach to negotiations, which is to emphasize its ability to cooperate with the union. The United Auto Workers union formally opens negotiations with GM on Monday, Fiat Chrysler Automobiles on Tuesday and Ford the following week.

"It's very, very unusual," UAW Vice President Jimmy Settles says, adding that workers were upset when they were briefed on the news on Thursday. "You never feel good about that kind of information. But I am very, very confident that there will be a replacement product that we will secure for the plant."

Industry analyst Dave Sullivan of AutoPacific called it a "a power move before negotiations start ... Before today, Ford didn't really have anything to negotiate on. The UAW had the upper hand. Now Ford has wiggle room to negotiate for jobs and products."
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Ford already makes its U.S.-sold Fiesta subcompact cars in Mexico. With its low labor costs and bilateral trade pacts, Mexico is becoming a hub for auto manufacturing. Honda and Mazda already are making small cars there and Toyota plans to move its Corolla compact operations there soon. Eighteen foreign-owned auto plants are operating in Mexico now, and five more are under construction. A fifth of all cars sold in North America are made in Mexico. The country has seen a 40 percent increase in auto jobs since 2008, to 675,000. The U.S. increase has been 15 percent, to 900,000.

Head below the fold for more.

Christina Rogers and John D. Stoll report:

The loss of Focus production move deals a blow to the Obama administration’s attempt to encourage U.S. auto makers to make more fuel efficient vehicles domestically. [...]

Ford received a $5.9 billion U.S. loan commitment to retool 11 factories in five states to deliver fuel-efficient technologies. The loan was credited with creating or saving 33,000 jobs and covered hundreds of millions of dollars’ worth of work performed to convert the Wayne, Mich., plant from SUVs such as the Lincoln Navigator to constructing small cars, electric vehicles and hybrids.
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How many U.S. workers will ultimately get screwed by the move is unknown. That could depend a great deal on what how successful the UAW is in the coming negotiations. Up until now, the chief issues for the union in the contract talks are the continuing discontent over entry-level pay for new autoworkers—$19 an hour, $9 less than what it was before the Great Recession—job security and product guarantees. The union is also greatly concerned about U.S. automakers' foreign investments compared to what they are investing in the United States since past investments have seen hundreds of thousands of automaking jobs vanish.

 

[SPECTRE1]

I think Donald Trump was talking about this and wanting to impose tariffs which is the real reason for these attacks trying to discredit him. There are alot of large companies that do this, his position endangers their profits and makes them nervous. This is the poster child of how trade deals like the TPP will really be used.

From a business perspective, it makes sense to move your low margin cars to a low wage country. However, the measuring stick for wages is that people making the cars or parts should be able to purchase one. Many companies don't factor that in their decisions that the worker and the worker children will buy.

They are paying the workers $4 an hour. I looked up the price of a Ford Fiesta in Mexico which is the cheapest and calculated a car payment of $243. As of right now the worker will definitely not be buying a Ford car. This is something Henry Ford would not support, he advocated paying wages so they can buy his products.

 

[thoughtone]

I think Donald Trump was talking about this and wanting to impose tariffs ...

 

[SPECTRE1]

But Ford had an even bigger reason for raising his wages, which he noted in a 1926 book, Today and Tomorrow. It’s as a challenging a statement today as it as 100 years ago. “The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers.”

It might have been just another of Ford’s wild ideas, except that it proved successful. In 1914, the company sold 308,000 of its Model Ts—more than all other carmakers combined. By 1915, sales had climbed to 501,000. By 1920, Ford was selling a million cars a year.

“We increased the buying power of our own people, and they increased the buying power of other people, and so on and on,” Ford wrote. “It is this thought of enlarging buying power by paying high wages and selling at low prices that is behind the prosperity of this country.”

If you are selling a mass produced product, high wages will increase sales.