More job outsourcing. The good news is it could supply cash to pay for the Trumpster's fence.
It would be interesting to hear what Hilary has to say about Bill pushing through NAFTA while in office and how that makes it easier to move jobs to Mexico.
I tried to argue moving some of HPs assembly and R&D to Mexico in the 1990s rather than Singapore and was told they didn't have the universities nearby churning out educated workers or providing a place to train workers much as HP paid for me to take whatever graduate class at Stanford I wanted to help do my job better or GM paid to educate you.
Ford to More Than Double Mexico Production Capacity in 2018
Auto maker will build new plant in Mexico, expand existing factory
By CHRISTINA ROGERS
Updated Feb. 8, 2016 6:22 a.m. ET
Ford Motor Co. will build a new assembly plant in Mexico and sharply increase factory output from that country, representing the latest shift of investment abroad by a Detroit auto maker following the signing of a costly new labor deal.
The No. 2 light-vehicle seller in the U.S. plans to add 500,000 units of annual Mexican capacity starting in 2018, more than double what it built in 2015, according to people briefed on the plan. The plan mirrors General Motors Co.’s $5 billion investment to double Mexican capacity by 2018.
Ford will build a new assembly complex in San Luis Potosí, and expand an existing factory near Mexico City. The moves will make room for several models, including a yet-to-be-disclosed hybrid vehicle that is described as a Toyota “Prius fighter,” and will allow Ford to focus its U.S. factories on higher-profit trucks and sport-utility vehicles.
A company spokeswoman said in a statement, “We do not comment on speculation.”
Ford last year built 433,000 vehicles in Mexico, or 14% of its North American production.
Costs for the project likely will exceed $1 billion, people familiar with the details said, with factory construction beginning later this year. It follows a $2.5 billion investment Ford announced last spring to build an engine and a transmission plant in Mexico.
Mexico has lured tens of billions of dollars in automotive investment commitments in recent years, wooing car companies with low wages, improved logistics and an arsenal of free-trade deals. Most global auto makers have in recent years opened new assembly plants in Mexico or announced plans for one, including BMW AG, Volkswagen AG and Toyota Motor Corp. Honda Motor Co. recently began making its subcompact Fit in the country, investing $800 million in a new assembly factory. Kia Motors Co. also will open a new small-car plant in Mexico this year, the South Korean auto maker’s first in the country.
Detroit auto makers have long built cars and trucks in Mexico, but the country is looking more attractive following a new labor deal struck in November with the United Auto Workers that raises wages for U.S. factory workers. Labor rates in Mexico are roughly one-fifth of those earned by unionized workers in the U.S., a gap that is only expected to widen as UAW wages approach nearly $30 an hour in coming years, representing as much as a $10 increase for some newer hires.
Auto factories in Mexico produced 3.4 million vehicles last year, or about one-fifth of North American production, according to LMC Automotive.
Still, roughly three-quarters of Ford’s North America production is in the U.S., according to WardsAuto, and the company committed to invest $9 billion in U.S. assembly and parts factories through 2019.
Mexico auto output is poised to thrive during that time. LMC expects the industry’s Mexican production to grow 53% to 5.2 million vehicles by 2019 as the share of production in the U.S. and Canada falls. Mexico’s economy minister, Ildefonso Guajardo, said last month there would be several significant auto investments announced in the first quarter involving plants and new models but declined to elaborate on specific deals.
UAW President Dennis Williams, speaking to reporters on Friday, said he doesn’t buy the argument that car makers can’t absorb higher labor costs. GM late last year laid out plans to start shipping Buick SUVs from China to the U.S., and one of Fiat Chrysler Automobiles NV’s new Jeeps is built in Italy. Ford is planning to build as many as three models at the San Luis Potosí plant, with capacity to churn out as many as 350,000 vehicles a year.
More at wsj.com |
