In recent months, Ford has put a lot of emphasis on the importance of American manufacturing and why it chooses to invest more in the U.S. than any other automaker through its “Built For America” ad campaign. Ford is proud of the fact that it employs more hourly workers and assembles more vehicles in the United States than any other automotive manufacturer. But it’s no secret that building vehicles in America is far more costly than in other parts of the world.
On the same token, Ford has been going through a bit of a financial rough patch recently, partly due to the COVID-19 pandemic. Ford’s stock has reached historically-low values over the last several months, with some being the lowest recorded in over a decade.
In all fairness, values have risen since the automaker released its second quarter 2020 earnings report, but Ford still reported a $1.9 billion loss in Q2. Regardless, one sure way to drive stock price upward would be to increase profits, which can be accomplished by lowering costs.
Meanwhile, the Ford F-150 continues to be a bright spot in the automaker’s lineup and a pivotal component of the U.S. economy as a whole. Ford sold nearly 900,000 F-150 pickups in 2019 alone, a truly astounding figure. Currently, F-150 production takes place exclusively in America, at the Ford Dearborn Truck Plant and Ford Kansas City Assembly Plant.
Taking all of these factors into account, it’s worth wondering – what if Ford shifted F-150 production to Mexico? And how much money, exactly, might it save by doing so?
“I can’t really put a number on it, as you know the labor and overhead costs in Mexico are substantially lower, so a lot of our competitors build a lot more of their products not in the U.S. and that – as Bill [Ford] said earlier – that is a price we pay,” Kumar Galhotra, Ford Motor Company president, Americas & International Markets Group, told Ford Authority executive editor, Alex Luft, in a recent interview.
“But it is a very short-term thing. We’re here for the long term, and our company has believed – starting all the way back in $5 per day – that we should be here for the long haul, be an integral part of our communities and create jobs, help the middle class, and that’s what we’ve continued to do by having a much broader manufacturing base here than some competitors.”
Galhotra is referring to Henry Ford’s stunning decision to double the wages of Ford employees to $5 per day back in 1914. At that time, the notion of a wealthy industrialist sharing profits with workers on such a scale was unprecedented and widely applauded around the world.
Even if we can’t put an exact dollar figure on what Ford might save by shifting F-150 production to Mexico, we can confidently say that it would be substantial. Regardless, that move, which would likely be met with tremendous public backlash, doesn’t appear likely to ever happen. Instead, Ford would rather consider that extra cost an investment in the country that helped make it what it is today.
We’ll have more fascinating insights like this to share soon, so be sure and subscribe to Ford Authority for the latest Ford F-Series news, Ford F-150 news, Ford business news, and continuous Ford news coverage.
Comments
Nope don’t even think it, move to Texas where FORD sales the most trucks. Ford can build the Fusion, MKZ, Eco Sport, Focus. Edge, Nautilus or anything else in Mexico not F-150, Mustang, Bronco, Explorer, Aviator, Expedition or Navigator
And you sir are one the this great countries problems!!!
I don’t see problems, I see Solutions, It will be fine the F-150 is best built here
Save money maybe, but loose customers, likely. So where would the actual savings be then?
The only 1 savings are ford stockholders . Why will the consumer then get a F150 4×4 crewcab with Fx4 301A pkg & Locking rear hub in the Northeast For $24,999-
I know so !
Or a Loaded King Ranch F450 crewcab 8″ bed for $39,999. I’m Rite again
That would essentially put the whole Rouge complex and many local suppliers out of business.
Moving any production to Mexico will not lower the sticker price, you can bet on that.
Brett Foote, you should be ashamed of yourself for writing such an UN AMERICAN notion of Ford moving the F150 production to Mexico. There is a lot of junk products coming from Mexico, which we certainly don’t need here; cheap wages and poor quality has a price.
The most important part is that you have shown your true colors to the United States, you must a damm arrogant liberal. If you don’t like it here, I’ll personally come and help you pack and even drive your miserable rear to the border. Oh by the way, your America Citizenship will be deleted permanently just as you cross the border. We don’t need people like you tearing at the fabric of our country, it’s time for you to move on and out of here.
We are Making America Greater.
Rich, It is obvious you hate Mexico. My Fiesta ST was made in Mexico and since new in 2016 has had one problem in that Ford could not update that one model of the Sync 3 System and replaced it in one visit to the dealer. The Ford Mexican products are reliable and I have zero problems or complaints on my car. It has 215 HP and a lil’ rocket with great handling, brakes and economy. 37.5 MPG on last 4000 mile long road trip driving it at times well over 85 mph in western states where 85 is the speed limit! The car is a cult classic and after driving it for 4 years I can get 80% of what I paid for it on the open market. Our Mustang GT was built in KY and has also been a car we are in love with, 460 HP and a super Grand Touring machine. Again fast, reliable and an absolute joy to drive. Ford provides more SPG (Smiles Per Gallon) than any other vehicles. Ford also offers the performance Ford customers what we want with quality and a great price. Your opinion of “poor quality” is based on dislike of Mexico not facts! For jobs reason I do not want Ford to make cars FOR the US market anywhere but the USA. But it has nothing to do with the phony cry of poor quality it has to do with USA jobs.
Mustangs have only been built at Dearborn, Flat Rock, San Jose, and Edison.
You are correct sir! Don’t know why KY jumped in my brain.
It wasn’t even an opinion piece, he was stating the obvious. Threatening an American journalist with banishment because of the content of an article is one of the most un American things you can do.. It’s unconstitutional. Maybe you should move to North Korea where free speech and journalism is suppressed and punishable. How the hell is putting a noose around our rights going to make this country better? It’s so ironic and hypocritical of you to suggest he lose his citizenship because of an article.
Clearly, you didn’t read the article, or at least didn’t comprehend it very well. I would suggest trying again. No one is saying that Ford should produce the F-150 in Mexico, myself included. I have owned over a dozen Ford trucks in my lifetime, including a handful of F-150s, and I’m proud of the fact that they are produced in the U.S. The entire point of the article, which you clearly missed, is that Ford is willing to spend the extra money and keep F-150 production in America, and that’s both commendable and worth pointing out.
It would create huge profits for Ford for a short time if such an announcement was ever made; the time from the announcement to the production of the last US made truck. Those “Last of the Best” F-150s would command full MSRP. After that sales would be decimated- a distant sixth behind the Nissan Titan.
Ford’s $5.00 a day in 1914 was so revolutionary that it resulted in a Congressional investigation (as it more than doubled Ford’s manufacturing competitor’s pay which I believe that at $2.43 a day was the top pay by any competitor). Yes, Ford Motor Company was hauled before Congress to explain just why it would pay its employees a fair daily wage (a wage that would actually allow its employees to build up some savings and maybe buy one of the Model T fords that they helped build or buy a home ).
Ford’d better keep working on that hydrogen F-150 if it wants to keep the lead in trucks. No, battery trucks won’t do, not for Ford customers. Got work to do — no fooling around with batteries.
I don’t see a problem with American build but I do have a problem with having an American flag shoved down my throat every time I walk up to the door. It is bad enough that I haven’t been able to buy a Canadian build one since the late 70’s thanks to our government and unions.
If Ford moved f 150 manufacturing to Mexico they would not be able to call it “American Made”. That would be another big blunder for Ford to deal problem for Ford to handle. I hope in everything that is holy and sacred to Ford. That will NEVER be done. Keep the F -150 built proudly built it the United States of America. Where proud Americans can go home after a hard day of work and say I helped keep America working and driving.
Straightup! NO TO MEXICO. To many products and jobs have been farmed out of the US all for the stock holders and CEO’s etc. Rediculous so many companies turned there back on their own country for a buck!
You want to see how fast your decision backfires 10 fold? Move your production to another country and see! I’d never own another Ford if you did, and I think millions would agree and ford would possibly end up history like so many others. Never turn your back on family and their support!
That would just mean their profits go way up and out price stays the same. Just like Dodge did in 1994. The ram1500 went to Mexico and costs actually went up for consumers. Oh… did I mention loss of american jobs?
Trump would put a tax Tariffs on Ford if they move there building of Tracks and car to Mexico. I believe the USMCA Trade agreement has this cover. its a much better trade deal then NAFTA Was.
Uhhhh……..Rich?
Don’t you mean,
“American Citizenship?”
I’m struggling to find the words to properly describe the level of ignorance that one individual has managed to jam into one abhorrent display of the type of mindset that has undoubtedly lowered the national average intelligence score by at least 20 points. You managed to accomplish this “dumbing-down” all for an article where the journalist maintained an objective point of view on the matter. That’s good journalism.
Furthermore…….
A TRUE American, is neither conservative nor liberal. The more you try to distance yourself from your fellow countrymen, by believing that there are opposing sides to our country…..
The less of a true patriot you’ll be.
Dingus.
Uhhhh……..Rich?
Don’t you mean,
“American Citizenship?”
I’m struggling to find the words to properly describe the level of ignorance that one individual has managed to jam into one abhorrent display of the type of mindset that has undoubtedly lowered the national average intelligence score by at least 20 points. You managed to accomplish this “dumbing-down” all for an article where the journalist maintained an objective point of view on the matter. That’s good journalism.
Furthermore…….
A TRUE American, is neither conservative nor liberal. The more you try to distance yourself from your fellow countrymen, by believing that there are opposing sides to our country….. The less of a true patriot you’ll be.
Dingus.
Okay let’s talk facts, the average worker in Mexico for an automotive plant is about $8 well it’s roughly $28 in the US give or take all the extras that the US has to pay like healthcare.
It’s been said that four trucks take roughly 40 hours of Labor to put together.
So what’s 40 * 20 equal, $800.
Pretty sure it’s worth it to ford to eat that $800
900,000 × $ 800 = Wow!