Popular automobile company, Ford Motor Company Tuesday, September 14, announced it is shifting all its production of small cars from North America to Mexico.
USA base company’s CEO, Mark Fields told investors during a conference in Dearborn, that the move is part of plans to make production simpler and less expensive. Fields said at the daylong conference:
“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.”
According to Detriot Free Press report, the company’s production investments in Mexico has become a lightning rod for controversy in the presidential election, as Republican Presidential candidate, Donald Trump rain criticism on the auto-tech company, accusing them of stripping thousands of American citizens of their jobs in the company. Trump said during his campaign visit to Flint, Michigan – where Ford is based – on Wednesday.
“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. When we send our jobs out of Michigan, we’re also sending our tax base.”
However, Ford had said it would continue to invest heavily in its U.S plants, hence workers retains their jobs. The automakers reported made a commitment last year to invest $9 billion in U.S. plants, with about half going to 11 facilities in Michigan – a deal which created or retained more than 8,500 jobs as part of a new four-year contract with the United Auto Workers union, and became a net increase in the U.S.
Mexico seem to have become a harbor for automakers for the following reasons:
- lower wages
- trade agreements with 44 other countries
- a robust rail and shipping infrastructure
- and a workforce that has proven it can make high-quality cars.
Just like Ford, other automobile companies such as General Motors, Honda, Hyundai, Nissan, Mazda, Toyota, Volkswagen and Fiat Chrysler Automobiles have announced plans to either expand existing plants or build new ones in Mexico.
Ford’s decision to shift the assembly of small cars to Mexico can reduce costs to a point and in turn, create jobs in Mexico. Fields explained that the current Ford Focus can be ordered in 300 different configurations of options and colors and Ford wants to reduce that to 30, which will make the production process simpler and less expensive.
He acknowledged that Americans prefer larger vehicles, especially pickups and higher-riding SUVs and crossover vehicles for their personal use.