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Ford announces new investment in Mexico amid election-year controversy

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Source: Reuters http://www.reuters.com/article/us-ford-mexico-investment-idUSKCN0X21VA

Ford Motor Co (F.N), criticized by Republican presidential front-runner Donald Trump for manufacturing outside the United States, announced on Tuesday that it would invest $1.6 billion to build more small cars in Mexico, starting in 2018.

The automaker made the announcement as Trump, U.S. Senator Ted Cruz of Texas and Ohio Governor John Kasich competed in a primary in Wisconsin seen as crucial in the race to become the Republican presidential candidate in the November election.

 

Hinrichs declined to say what products Ford plans to build at the San Luis Potosi plant, which is slated to open in 2018 and will employ 2,800 by 2020.

U.S. supplier sources have said the plant is expected to build the next-generation Ford Focus compact, as well as a Focus-based hybrid gasoline-electric model aimed at rival Toyota Motor Corp (7203.T) and described as a "Prius fighter."

 

 

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Figure that plant comes online for 2018 - so 2019MY for the next Focus. Maybe get a Q1 launch on the Focus. MAP could close for retooling end of Q4 2017 with product launches in Q3/Q4 2018. So the Bronco/Ranger should be out in about 2 1/2 years.

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Well I'm sure we will be hearing from the Donald on this one! No more Lincolns at the airport to pick up the Donald-take that Ford! What amazes me is I haven't heard any intelligent response from his two competitors on this issue.

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Well I'm sure we will be hearing from the Donald on this one! No more Lincolns at the airport to pick up the Donald-take that Ford! What amazes me is I haven't heard any intelligent response from his two competitors on this issue.

I haven't heard any intelligent response out of anyone on any issue.

 

But anyway, I do wonder exactly how the timing will work out. I don't see a year gap in between model years.

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http://money.cnn.com/2016/04/05/news/companies/ford-mexico-plant/index.html

 

Same story here by CNN. I'm posting this link mainly because it shows the Chicago plant in action building Explorers, and if you're like me and haven't spent appreciable time in manufacturing plants, it's quite intriguing. :)

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It's a no brainer that with NAFTA, less profitable production will move to Mexico - what burns me is that Toyota, Honda, Mazda and the other foreign brands have moved or are moving there, and fly completely under the radar.

 

http://www.theyucatantimes.com/2014/12/the-worlds-auto-parts-industry-is-on-the-move-to-mexico/

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While I don't like losing American jobs, there is another thing to consider. For every job over the border that is created, that should decrease the likelihood of an illegal coming to the US for jobs. They'll stay down there.

 

I'd like to see how The Donald would explain that one.

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Higher wage producers will, in the long-run, be out-sourced to lower wage labor or be automated away. I just wish we could retrain our workforces faster. It's not globalization that we should be mad about; it's how little we (gov't, community, family, personal) do to support those who need to build new skills to get a new job and become more "productive."

 

If I were running the UAW, I think I would make it my mission to actually train and educate workers up and out of my low-skill workforce over time. It might actually make people want to join the union and companies want to (pay to?) work with it. Sort of like the consulting companies do to new college grads - take 'em, train 'em, and then push 'em out of the nest in the hopes that business comes back in the future.

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If the Ford employees in the US want to work for a viable company and retain their jobs and benefits, then you better be glad they are running their business with a focus on profits and not just on headcounts.

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Trump: "We are done shipping jobs out of the country, we are building a wall".

Clinton: "if companies choose to leave the USA, we will tax them an exit fee".

 

Election: Nov 8th, 2016.

 

Hmm, yeah if I were a company I would be making that decision ASAP....

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The profit from every Focus and Fusion they sell from a Mexican plant subsidizes all the other vehicles that are continuing to be made in the U.S. and Canada.

 

If they start moving trucks, vans or mid/large utilities to Mexico then that's a different situation altogether.

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Clinton: "if companies choose to leave the USA, we will tax them an exit fee".

 

This (along with increasing regulations and taxes) is like opening up a supermarket in a town with dozens of other supermarkets, charging 20% more and telling people they have to shop in your store. Then acting surprised and trying to charge them another fee when all your customers leave and go to other stores.

 

Until we realize that creating real jobs is the answer and that the U.S. is competing with other countries for those jobs we're screwed.

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I'm pretty sure that GM has an even bigger manufacturing footprint in San Louis Potsi yet nothing is said.

 

 

The second Silverado plant is located there and also builds the Tahoe...

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The profit from every Focus and Fusion they sell from a Mexican plant subsidizes all the other vehicles that are continuing to be made in the U.S. and Canada.

 

If they start moving trucks, vans or mid/large utilities to Mexico then that's a different situation altogether.

The profit from every F-150 and Super Duty subsidizes everything the company does. Period.

 

No F series and Ford probably would have merged with Chrysler in 2009.

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The profit from every F-150 and Super Duty subsidizes everything the company does. Period.

 

No F series and Ford probably would have merged with Chrysler in 2009.

 

While there is some truth to that, it's not the case like it used to be. Ford's new business model is that every product has to make a profit. That's the reason the Focus is moving to Mexico and Ford is bringing the Ranger/Bronco (rumored, yes) to MAP, because they can charge the higher prices to pay the workers more.

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Funny how nobody complains about Oakville.

Most people don't even know Oakville exists. A friend of mine bought an Edge when the 2014 fire sale started to make room for the 15s and was surprise when I told him where it was built.

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It's a bummer imo but since small cars sell greater in Latin America it make financial sense.

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Here's the rub....Ford is not closing a plant and shipping the jobs across the boarder...

I agree, and Ford has agreed to add jobs in the U.S., granted its not as much as if they built all plants in the U.S. but at least they are better for our economy than foreign brands. Per Ford - "In response, Ford highlighted its investments in the U.S., saying that the company spends more than 80 percent of its capital in the U.S. and has committed to spending another $8 billion to $9 billion in the next four years." https://finance.yahoo.com/news/ford-build-small-car-factory-150120495.html

 

I also think there is a benefit to building plants in Mexico vs. importation from Korea or Japan in that Mexico, like the U.S. and Canada are in North America and improving our neighbors economy has numerous direct benefits for us. Granted the same could be said for world trade in general, but at some point we can't be running trade deficits with everyone especially countries like Japan for whom our military budget covers. I don't like Trump at all, but relative to his comments about providing/paying for military protection for some countries and letting them also benefit from huge trade deficits does make sense. Thankfully if that's the deciding factor in a candidate I've got Bernie.

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At least Ford is not importing cars from China... yet :stirpot:

Edited by bzcat

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At least Ford is not importing cars from China... yet :stirpot:

 

Unless you heard something that nobody else has, I can't see that happening.

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It's not going to happen. It's still more economical to build in a low-labor-cost American (continent) market and import to the US than to do so from China. And the Chinese/Asian manufacturing capacity is needed for the Asian markets anyway.

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The profit from every F-150 and Super Duty subsidizes everything the company does. Period.

 

If you're going to buy into the plant profit numbers that you hear at DTP, you've got to realize that those numbers don't go straight to the bottom line. Pretty much every vehicle that rolls off an assembly line at Ford Motor is making a profit at the plant level. It's the SG&A and R&D payoff costs that knock those numbers down all the way across the line.

 

No F series and Ford probably would have merged with Chrysler in 2009.

 

 

And if my granny had wheels she'd be a wagon. :)

Edited by RichardJensen

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It's a no brainer that with NAFTA, less profitable production will move to Mexico - what burns me is that Toyota, Honda, Mazda and the other foreign brands have moved or are moving there, and fly completely under the radar.

 

http://www.theyucatantimes.com/2014/12/the-worlds-auto-parts-industry-is-on-the-move-to-mexico/

 

I was waiting for someone to mention NAFTA. Given the products that are built in Mexico and where they are sold, it makes sense.

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