Trump’s Carrier Talks Up the Ante for Ford
Auto maker, criticized during the presidential campaign, is well on its way to spending $1.6 billion to build a new factory in Mexico
.. Ford’s Mexico plan has been long in the making and is the only way that executives expect they can stanch the losses associated with small-car production.
.. Still, many industry participants see them as necessary to meet fuel-economy standards because they help bring down the fleet average. That is why cars like the Focus are referred to as “compliance cars” in the industry.
.. Mexican production not only cuts the labor costs going into a Ford Focus, it also opens up more markets for export seeing that Mexico has dozens of free-trade agreements. More export destinations lessens the potential for unused factory capacity, which is the most common reason that auto makers burn cash.
.. In 2009, as part of terms of its government bailout, the auto maker agreed to keep a small car plant open in Michigan. That factory operates well below its capacity, but it appears to be under no threat of closing.
.. Fiat Chrysler Automobiles NV doesn’t see small-car sales as a key method for meeting fuel-economy requirements. As a result, it is converting all of its U.S. car-assembly capacity into light-truck capacity. This means that Dodge Darts and Chrysler 200s are no longer made in the U.S. as of Friday.
.. About 17% of the Detroit 3’s North American output is currently sourced from Mexico
.. U.S. auto factory workers are relatively expensive and executives want them building their highest-margin vehicles.