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Thursday 29 September 2016
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Hot Topic: Ford Moving Small Car Production To Mexico

Hot Topic: Ford Moving Small Car Production To Mexico

No matter which side of the fence you are on politically, it was poor timing on the part of Ford to announce it was moving production of the Ford Focus and C-Max to Mexico.  After all, this is an election year and one Presidential candidate or the other is going to take offense to any major announcement.  In this case, Republican candidate Donald Trump has been outspoken on American jobs going outside our borders.

I have tried to look at both sides of this issue, and on the air during the Car Pro Show, I never show any political leanings, it’s just not wise to alienate any part of your audience.  If you must know, or if you wonder, my politics have generally been towards the conservative side, but I waiver, like most.

So the announcement of the new Mexico plant seemed to me like one that could have waited by Ford until after the Presidential election.  I still don’t see the reason why a huge American corporation would put itself in the limelight of either side of this debate.  It doesn’t seem like a subject that would endear the masses to your car company, but I digress.

The facts are fairly simple…given the labor cost of building a small car in the U.S., for every one you sell, you lose money as an automaker.  That has not always been the case, but more recently with lower gas prices and the shift to SUVs, small cars just aren’t doing very well.  However, all automakers must continue to make them to meet CAFÉ (Corporate Average Fuel Economy) ratings.

For me, the question is more about the big picture.  Is it worth losing some jobs in America in the short term, for a healthier Ford Motor Company?  I have to say yes.  If Ford can make smaller cars in Mexico a lot cheaper, meet its EPA goals that are mandated, and make small cars profitable for the bottom line, if I were the CEO Mark Fields, it would be an easy decision.

If Ford went on the offensive, which it should have, they would note that they actually closed a heavy-duty truck plant in Mexico last year, and moved it to Ohio.  The rumor mill says that the plant it is closing will re-open making the Ford Ranger and Bronco, two vehicles that could preserve jobs overall.

The Ford CEO, not one who has been my favorite over the past 40 years I have been in the industry, still has a responsibility to the shareholders of the motor company.  He must do what is best for the good of all, without regard to being politically correct.  Looking back to around 2008, you know that then-CEO Alan Mulally did that exact thing.

Just about every automaker builds cars away.  The Japanese car companies have opened many plants here, all the automakers are making a shift to Mexico and Canada, and the list goes on.

The bottom line for me is during a political season, you will hear things that are intended to incite from both sides.  In this case, I think Ford made the right decision, and ultimately, a healthy Ford is good for America.



Photo Credit: Ford