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U.S. AUTOMAKERS CONTINUE TO MOVE SMALL CAR PRODUCTION TO MEXICO

Ford announced in September that it would shift all its U.S. small car production to Mexico over the next two to three years.  In so doing they join Fiat Chrysler and General Motors in an effort to save money building the low-profit vehicles.  As gas prices remain low, consumers lean toward larger vans and SUVs, which will still be built here.  If, or when, gas prices start to go up, will preferences change?

Ford has insisted that no jobs will be lost as workers are transferred to other divisions of the company making larger, more profitable vehicles.  That didn't stop Donald Trump from haranguing  Ford executives and vowing to change a system that encourages such activity.  Easier said than done.

The average Mexican autoworker earns the equivalent of $8 to $10 per hour, compared to $29 for "top-tier" auto workers here.  Last year, Mexico passed Japan to become the number 2 exporter of cars to the U.S.

In defense of Ford, it has created 28,000 U.S. jobs and invested $12 billion in U.S. facilities over the past five years.  It also builds more vehicles and employs more hourly workers in the U.S. than any other automaker.  It is also worth noting that Ford did not accept bailout money during the economic collapse of 2008.

Is it even possible to buy an all-American car today?  No - and the closest you can get right now is the Toyota Camry (that's Toyota of Japan), assembled at plants in Kentucky and Indiana with the most domestically produced parts, according to Cars.com.  That's the global economy for you.

Source: The Week September 30,2016 issue -  "Issue of the week: Ford's move to Mexico".  The Week prepares articles by compiling those written in other publications which provides different perspectives.

By Allen L Phillips

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