Ford’s Trucks Continuing to Be Built in the United States
If you’ve been following our coverage you already know this, but Ford is shifting their small car production out of the United States and to Mexico. Some small cars, such as the Fiesta, are already built there. But the other, lower-margin cars are heading that direction.
There’s a ton of reasons why this makes sense for Ford, including the main one; their fiduciary duty to shareholders. You see, Ford is a publicly-traded company and the stock market can be cruel. If the company doesn’t returning increasing profits, people dump the stock. Don’t forget, in some cases those people are you through your retirement accounts.
The lower-margin small cars aren’t doing so well sales-wise here in the United States, and when you’re already working with razor-thin margins something has to give. By moving production of those cars out of the United States, Ford can focus on their higher-margin vehicles — trucks — here in this country. They are selling really well, and Ford can offer better job security to U.S. workers by having them build the F-150 here instead of the Focus. It seems like a fair compromise to me.
“Shouldn’t Ford build all their vehicles in the United States?”
Name one major manufacturer that builds all the vehicles they sell in the United States in the United States — besides Tesla. I’ll wait…
In the last round of negotiations with the United Auto Workers, Ford struck a deal that allowed the UAW to get increased wages for their workers while still letting Ford remain on the side of profitability. That’s the shifting small car to Mexico production plan. Now, I’m not saying that the UAW wanting higher wages for workers is the cause, but it is one of the many factors involved. Others include our country’s trade deals and import / export rules. All of these conditions are factored in to a company’s decision to move in our out of a country.
Similar factors also, according to presidential candidate Donald Trump, are the reason his clothing line isn’t produced in the United States.
In an ideal world I’d like Ford to build all their cars in the United States, providing the most jobs to American workers. We, however, live in a global economy that’s hardly an ideal world. Over the next few days you’ll see people attacking Ford for their decision — that wasn’t even breaking news — but remember their trucks are built here. In fact, they’ve even shifted out-of-the-country production of trucks, like the F-650 and F-750, from Mexico back to the United States.
I’m sure all of you have an opinion on this subject, so I encourage you to let us know what you think the comments section below or over in our forums!