This week, Ford Motor Company confirmed that over the next several years, all North American small-car production will be shifted south of the border to Mexico. This is being done to save on labor costs in an historically low-margin segment.
But why should we in the United States necessarily care? Ford still produces plenty of its North American vehicles here, and in the most recent round of contract negotiations with the United Auto Workers union, the automaker committed to investing another $9 billion in US facilities, and creating or retaining as many as 8,500 domestic jobs. Throughout 2015, Ford built more of its North American vehicles in the US than either Fiat Chrysler or General Motors: 80 percent for Ford, versus 64 and 63 percent for FCA and GM, respectively.
And while production duty of the Ford Focus and C-MAX compact models is moved away from the Michigan Assembly Plant in 2018, the facility will move on to bigger and better things like a new Ford Ranger mid-size pickup for the North American market, and possibly a Bronco SUV.
Still, Ford’s small-car production shift is sure to draw the ire of many, especially as the issue of outsourcing has been so central to presidential candidate Donald Trump’s campaign this election cycle. Some will insist that Ford’s strategy is necessary to cut costs and maintain profitability in a cooling, low-margin segment, or will defend the automaker by pointing out that it’s still very much committed to US production. Conversely, some will drag Ford over the coals, insisting that Ford is exporting good, decent-paying jobs that belong here in the company’s home country.
What do you think? Is Ford’s plan to shift North American small-car production to Mexico morally objectionable, or just good business practice?