Ford to Build Small Car Factory in Mexico, Adding 2,800 Jobs

Why not have those people work in the service industry?

Why not in extraction of resources? Why not in construction?

There are dozens of sectors of the economy that have low skilled positions.

 

Outlaw unions in the US. That will save Ford lots of money and keep people off the welfare rolls. Eliminate the PPACA--that will save companies lots of money and keep them off welfare. Eliminate CAFE standards; eliminate air bags--there are lots of things could be done which would save the actual business money if that is your true goal. It shouldn't cost an average of $60 per hour to have someone sit there on an assembly line turning bolts. to begin with, especially when most of the parts are already made overseas

 

Sorry you aren't intelligent enough to understand the remark.

 

What a joke!
Toyota bribes them for those ratings.
They hide their safety issues, as well. https://www.justice.gov/opa/pr/just...against-toyota-motor-corporation-and-deferred
Probably just the tip of the iceburg. Their accountants paid customers not to report issues.
I own a Ford built in Mexico. Best car I ever had. Just tripped 300k miles. Still on original ps pump, os sensors, catalytic converter, and air filter. I followed the recommended service and gasoline.

 

Funny, I knew someone who kept going on and on about the outstanding quality of German engineering in his VW and it's faultless reliability.
I opened the drivers door and showed him the "Made in Mexico" sticker.
Next day he was at the dealership crying "fraud" and demanding his money back

 

it was engineered in Germany

 

Not the same as actually being made in Germany. After all if you buy something sold as a German car, it should be, well a German car.
Can you imagine if you bought a General Motors vehicle and found a "Made in China" sticker on it, oh wait a minute!

https://finance.yahoo.com/news/why-gm-is-importing-a-buick-from-china-130758915.html

 

I'll say this - that difference in labor cost is not enough to justify building cars in Mexico rather than the US purely on the basis of market competition. People aren't going to base their buying decision on such a minor price difference.

This is done to maximise profits for the ******ned shareholders.

 

the difference in cost of labor (CoL) is more than what the OP wrote. he assumed that the only labor involved are the hours spent on the assembly line and assumes 1 person. There are a whole host of other functions which occurred in advance of final assembly

 

It's always about enriching the shareholders. Consider what the Costco CEO and Costco shareholders have said about it - he pays his employees more than the competition and the shareholders whine that they're not getting a bigger cut.

This is why we have the wealth gap - for years, shareholders have been getting profits that should have gone into wages and benefits.

 

heaven forbid should an investor seek to gain from an investment

 

Generally speaking, the marketplace - supply and demand - should determine that. But I think that is assuming that we are all playing on a level playing field, and, with other countries, we are not. So if those other countries are inducing our manufacturers to leave the U.S., it is only fair that we try to induce them not to leave the U.S.

Because the service industry doesn't pay anything and offers very little chance of advancement. Good companies that manufacture things create wealth and offer better pay and a chance to move up.

People who work in the extraction of resources make good money. I am in favor of allowing the U.S. to become 100% energy independent. Construction is an industry that is heavily dependent upon the health of the larger economy. When that larger economy is healthy, construction is healthy. When the middle class is healthy, construction follows. My focus on manufacturing is aimed at keeping the larger economy healthy.

Right, and it will always be that way.... a place to start and establish a track record. And with that track record you apply to a better company that produces more money and needs good workers. A place that will train you in new skills and pay you better. And, in time, maybe you can become a lead person, then a shift supervisor, and then an assistant section manager, then manager ... and so on.

Wait a minute ....

What better company?????? Sorry, it moved to Viet Nam.

"Outlawing unions" is not going to happen, although I am anticipating the collapse of the ACA because I don't think it's sustainable. When that happens, we're going to need good companies more than ever. Companies that pay enough for families to purchase health insurance or that provide health insurance as a part of the compensation package (like all decent companies used to do).

Well let's take a look at that $60/hour for a moment. At least $20 of that goes to health and retirement, leaving $40/hour. $40/hour is $83,200/year. That was a fortune in the 1970s, but it is not a fortune anymore in 2016. That is a middle class income. That is just barely enough to own a home and support a family .... just barely. It is not enough in some areas of the country. My wife and I both work. Together, we've been making substantially more than that for a long time, but I consider us solidly middle class. We are not "rich" by any stretch of the imagination.

Right. And, as has been pointed out by other posters, my unscientific comparison may not be completely accurate. The difference may be more. But yes, people will buy cars - especially new cars- not so much based upon price, but upon how much they like the car. If there is a $2000 difference between two comparable cars, you're going to buy the one you like better. When broken down into monthly payments over 48 months, that $2000 is not very much of a difference. You'll take the one you like best.

Yes, there are many costs that go into a car before assembly. But the issue here is an assembly plant that is being built in Mexico rather than in the U.S.

It would lower the company's cost of production. That does have an effect. Combine that with tax-free profits on those cars that are produced here in the U.S. Now offer that to all companies who actually produce stuff in a factory, and see what happens. My ideas are not Ford-exclusive. And remember, the more people who are working and making good money, the less pressure there is on the federal government to pay out support payments (welfare).

People who actually produce stuff have always made more than service industry workers. I remember way back in the early 70s I went from a $2/hour grocery clerk to a $3.75/hour box assembly worker on an assembly line. My supervisor was making an amazing $5.75/hour. Times have changed and the dollar amounts, but when I was actually producing something, I was making more. I was making about 87% more in pay. I did have to learn some new skills, believe it or not, and my supervisor knew how to service and fix the machine, so he was earning his money too.

Yes, but it is the role of proper government to promote the general welfare of the people. It is not the role of the people to primarily support the welfare of the government. Tariffs, as I see them in this issue, are not intended to support the government, but to act as an inducement to manufacture here in the U.S. It is a negative action, granted. The corporation must still offer their product to the public at a competitive price, or else the public won't buy it. So, they can try to pass on that cost to the consumer, but the consumer may choose not to pay it, and, instead, buy a comparable product that costs less. In order to sell the product, the corporation may have to keep the price of their product competitive, in which case they may have to just eat the cost of the tariff out of their profits. The idea is to take away the profit that is derived from having cheap labor build the product overseas. I want corporations to see that they will not increase profits that way, so they may as well produce in the U.S., provide decent jobs here, and take advantage of the other inducements I have suggested - the positive ones.

 

I don't think that anything you have written here is relevant. Pay is determined by numerous factors. To simplify, there are profits, demand for labour and regulatory concerns. I'll leave out unions. Also, wages are generally sticky. The prices of commodities go up and down, but wages rarely do. So it doesn't matter if you are making burgers or airplanes, the employer is not going to pay an employee to work at a loss to the company. So, if it is not profitable [enough] to pay a line worker $25/h to build a machine and they can't cut wages, the company is going to go elsewhere. Conversely, if a particular skill is in demand like your supervisor who could fix a box making machine, then his wages are going to go up. It's worth a lot of money for a company to restart a shut down assembly line. People working on the line are more replaceable, therefore less valuable individually to employers.

You can demand that the US government demand that all cars be assembled in the US. If they did that will violate numerous treaties and probably lead to other countries invoking dispute resolution terms of the treaties and possibly retaliation. Corporations would file law suits, especially chapter 11of NAFTA. I don't think that the government wants that. The US has so much clout in these trade agreements due to its market size that it's hard to believe that they are not getting what they want out of these agreements. If you believe in the free market, then it's working as it should. If your leanings are more on the communist side then you would have issues with private ownership of production and it wouldn't matter where cars are built as long as the people owned the means of production.

 

It is simple, Businesses' main goal is to make profits to maintain themselves and to grow. Workers are paid from the profits. Ford has no political obligation to keep a factory in the US or to move it to another country.

 

Thanks for the feedback. I'm going to address a few of your points ...

I don't really want to demand that they produce in the U.S. Instead, I want them to want to produce in the U.S. I want to offer them carrots - anything in our power to do - as positive inducements, first. I would like our goal to be to make our country the most production-friendly nation in the world. I would much prefer to remind them that there is a stick and wave it around a little than to actually use it. The stick would be a last resort. I happen to have the same philosophy about the use of military force as well.

Yeah, but who are they? As tens of thousands of production jobs have gone overseas in the past 15 years, as the middle class shrinks, as wealth becomes more concentrated at the top, as the underclass grows, as cities deteriorate, who is getting what they want out of these agreements?

I am not a communist, I assure you. What I want is for the U.S. to compete to preserve production in this country, just like other countries do. And, I want a government that puts the needs of the people ahead of the wants of the rich and powerful. I don't think I have that right now. Republicans and Democrats are all the same to my mind. They are not representing the People anymore. And, increasingly, the People are waking up. Bernie Sanders' and Donald Trump's popularity both arise from this growing realization.

 

I thought free market people were against small cars. I thought they supported pick up trucks and manly vehicles. Aren't small cars for communists?