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1/03/2017 1:05 pm  #1


Ford cancels Mexico plant. Will create 700 U.S. jobs

 Ford cancels Mexico plant. Will create 700 U.S. jobs in 'vote of confidence' in Trump

http://money.cnn.com/2017/01/03/news/economy/ford-700-jobs-trump/index.html

Ford is canceling plans to build a new plant in Mexico. It will invest $700 million in Michigan instead, creating 700 new U.S. jobs.

 Ford (F) CEO Mark Fields said the investment is a "vote of confidence" in the pro-business environment being created by Donald Trump. However, he stressed Ford did not do any sort of special deal with the president-elect."We didn't cut a deal with Trump. We did it for our business," Fields told CNN's Poppy Harlow in an exclusive interview Tuesday.The $700 million investment will go to the Flat Rock, Michigan plant to produce more electric and self-driving cars.

Ford believes electric vehicles will outsell gas-powered vehicles within the next 15 years.Ford is planning to roll out seven new electric vehicles in the next five years, including a Mustang Hybrid.The news is a major U-turn for Ford. Trump repeatedly slammed Ford on the campaign trail for shipping U.S. jobs to Mexico (a claim the company said was wrong).

All of the big car manufacturers currently have some production in Mexico. Just hours before the Ford announcement, Trump criticized GM (GM) for producing cars in Mexico.
 


 “We hold these truths to be self-evident,”  former vice president Biden said during a campaign event in Texas on Monday. "All men and women created by — you know, you know, the thing.”

 
 

1/03/2017 1:22 pm  #2


Re: Ford cancels Mexico plant. Will create 700 U.S. jobs

Didn't strike any deal with Trump?  He-he-he.  We'll wait.

 

1/03/2017 1:23 pm  #3


Re: Ford cancels Mexico plant. Will create 700 U.S. jobs

In the SAME article. 

Ford is saving money by investing only $700 million instead of the $1.6 billion it originally planned.

After record years of U.S. car sales, there are signs of a slowdown. Small cars have been especially lousy sellers lately, which is why Ford is still moving production to Mexico. U.S. car workers make an average of $28 an hour, Swiecki says. In Mexico, workers average about $5.50 an hour.

Last edited by tennyson (1/03/2017 1:24 pm)


"Do not confuse motion and progress, A rocking horse keeps moving but does not make any progress"
 
 

1/03/2017 2:48 pm  #4


Re: Ford cancels Mexico plant. Will create 700 U.S. jobs

I'll offer my two cents here as a Ford shareholder. Ford's Hermosillo, Mexico assembly facility has been a quality control problem for some time now. Despite the savings in hourly wages for labor, with Mexico vs. USA production rates, in the normal material/labor/overhead calculations, this facility has cost Ford more money in recalls, quality fixes, and customer goodwill than the cheaper labor. That is one of the primary considerations for building the facility in Michigan rather than Hermosillo. Trump may attempt to claim responsibility for this decision, but the real reason is pure business economics in a decision by Ford executives devised from an internal process that began far more than one year ago.

 

1/03/2017 10:03 pm  #5


Re: Ford cancels Mexico plant. Will create 700 U.S. jobs

..... the real reason is pure business economics in a decision by Ford executives devised from an internal process that began far more than one year ago.

rongone nailed it, pure and simple.
 

 

1/04/2017 8:13 am  #6


Re: Ford cancels Mexico plant. Will create 700 U.S. jobs

Here's some clarification on Ford's action to further dispel Trump's claim of shaming the company into moving out of Mexico:

Ford announced several things at once, leaving the impression that it’s capitulating to Trump and ditching its operations in Mexico, where assembly-line workers earn about one-fifth what their US counterparts do. But that’s not what Ford is doing. “We’ll continue to do the right thing for our business, and the right thing for our customers,” Ford CEO Mark Fields tells Yahoo Finance in the video above.

The right thing for a business is usually to minimize costs and maximize profits. The right thing for customers is to offer the best possible product at the lowest price. Mexico’s low labor costs allow Ford to do that, which is why the automaker is determined to shift the production of its small cars, which usually have the lowest profit margins, south of the border.

Here’s what did change: Ford is canceling the construction of a new $1.6 billion factory in Mexico, which would have been its third in the country, and moving production of the Focus to another factory in Mexico where output has fallen recently. “We simply didn’t need the new capacity,” Fields says. “We can use existing capacity.”

The new investment in Michigan is essentially unrelated to the Focus or the Mexico news. Ford will spend $700 million in Michigan on new efforts to develop self-driving and electric cars, which, it says, will help create 700 new jobs. In a clever PR move, Ford announced all of this at once, with the the news of 700 additional jobs in Michigan overshadowing the fact that it is still moving the Focus production to Mexico—just to a different location.

Like Trump, Ford shareholders seem to approve. The company’s shares rose roughly 3% on a day the broader markets were flat. Investors may like the fact that Ford is reducing capacity in Mexico, which means lower costs, while possibly getting on the next president’s better side. But Focus production is … still … moving … to … Mexico.

Last edited by Rongone (1/04/2017 8:14 am)

 

1/04/2017 8:27 am  #7


Re: Ford cancels Mexico plant. Will create 700 U.S. jobs

Rongone wrote:

Here's some clarification on Ford's action to further dispel Trump's claim of shaming the company into moving out of Mexico:

Ford announced several things at once, leaving the impression that it’s capitulating to Trump and ditching its operations in Mexico, where assembly-line workers earn about one-fifth what their US counterparts do. But that’s not what Ford is doing. “We’ll continue to do the right thing for our business, and the right thing for our customers,” Ford CEO Mark Fields tells Yahoo Finance in the video above.

The right thing for a business is usually to minimize costs and maximize profits. The right thing for customers is to offer the best possible product at the lowest price. Mexico’s low labor costs allow Ford to do that, which is why the automaker is determined to shift the production of its small cars, which usually have the lowest profit margins, south of the border.

Here’s what did change: Ford is canceling the construction of a new $1.6 billion factory in Mexico, which would have been its third in the country, and moving production of the Focus to another factory in Mexico where output has fallen recently. “We simply didn’t need the new capacity,” Fields says. “We can use existing capacity.”

The new investment in Michigan is essentially unrelated to the Focus or the Mexico news. Ford will spend $700 million in Michigan on new efforts to develop self-driving and electric cars, which, it says, will help create 700 new jobs. In a clever PR move, Ford announced all of this at once, with the the news of 700 additional jobs in Michigan overshadowing the fact that it is still moving the Focus production to Mexico—just to a different location.

Like Trump, Ford shareholders seem to approve. The company’s shares rose roughly 3% on a day the broader markets were flat. Investors may like the fact that Ford is reducing capacity in Mexico, which means lower costs, while possibly getting on the next president’s better side. But Focus production is … still … moving … to … Mexico.

I love all of the so-called conservatives cheering Trump (i.e., the government) on this.

People need to remember, that publicly traded companies have to satisfy one group...their shareholders. Their first priority is to provide a return on investment.

The government has been and will continue to be a gnat that big corporations have to swat away from time to time. Donald Trump, who has never had to answer to shareholders and therefore doesn't have real life experience running a publicly traded company, may not fully understand this.


I think you're going to see a lot of different United States of America over the next three, four, or eight years. - President Donald J. Trump
 

1/04/2017 8:38 am  #8


Re: Ford cancels Mexico plant. Will create 700 U.S. jobs

Thus TWO spinmeisters for the cost of ONE ! 


"Do not confuse motion and progress, A rocking horse keeps moving but does not make any progress"
 
 

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