Ford is building plants in Mexico, but US jobs safe
In the summer of 2008, with the Great Recession underwayand Detroit’ s auto industry in a free fall, Ford Motor took a big gamble: It would switch three of its North American assembly plants from building trucks and sport utility vehicles to making small passenger cars.
With gasoline prices rising above $4 a gallon( Aou rn ₹71 a lit re) at the time and truck sales plummeting, Ford was losing billions and - along with General Motors and Chrysler - teetering on the verge of bankruptcy.
The centerpiece of Ford’s transition was its plant in Wayne, Michigan. There, the company would replace production of big SUVswi th that of compact cars, on the assumption that consumer demand had shifted permanently toward smaller vehicles.
“We don’t have a sustainable company if we don’ t do this ,” Alan RM ul ally, then Ford’ s chief executive, said at the time.
But eight years later, Ford, the nation’s second-largest automaker after GM, is once again reversing course in Wayne.
In a move that has drawn fire from Donald Trump and other critics of the North American Free Trade Agreement (NAFTA), Ford is giving up on making small cars in the United States and plans to move production of its Focus compact cars from the Wayne factory to a new plant under construction in Mexico.
Mexico’s car-making workforce is about 675,000 strong, according to the Mexican auto industry’s trade association.
But the story of Ford’s Wayne plant makes clear that many factors determine the number of auto making jobs in the United States-a figure that according to federal labor statistics has actually grown by 200,000 jobs, to around 900,000, since the recession gave way to economic recovery in 2009. The reasons include the state of the economy, the profitability of the vehicles being produced, the strength of the dollar, and how well or not each carmaker’s products are faring in the marketplace.
Ford’s Wayne factory signifies the reality of the marketplace. Simply put, Detroit cannot make money producing small cars in the United States, where an established union worker-not counting entry-level employees-might earn about $29 an hour, more than triple the wage sofa Mexican employee.
Ford’s chief executive, Mark Fields, has vigorously defended the company’ s Mexico strategy. He cites the 55,000 hourly workers the company employs in the United States and the 25,000 jobs it has added since the depth soft he recession.