Auto industry Ford Escape dispute with Trump

Published on November 21st, 2016 | by Steve Hanley

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Ford Continues Its Dysfunctional Tango With Donald Trump

November 21st, 2016 by  
 

During the interminable election campaign, Donald Trump tangled repeatedly with Ford CEO Mark Fields, criticizing him severely for moving production of the Ford Focus to the company’s assembly plant in Mexico, where average wages are 80% lower than in the US. Fields fired back that no American jobs would be lost and in fact the move would open up room in Ford’s US production facilities to build other vehicles that have higher profit margins. Presumably Fields means Ford F-150 pickup trucks and other similar vehicles.

Ford Escape dispute with Trump

Fields also pointed out that Ford has added 25,000 jobs in the US since 2011 and that it builds more cars in American than any other company. None of that had much affect on the blowhard-in-chief, who insisted that he will slap a 45% import duty on all cars produced in Mexico, dismantle NAFTA (which includes Canada, a fact that the Trumpster seems oblivious to), and build a hugely expensive wall along the border with Mexico.

Trump’s paranoia about Mexico and its citizens borders on mental instability. He started his campaign by describing Mexicans as murderers and rapists. He apparently has no understanding whatsoever of the effect globalization has had on manufacturing. The truth is that there are virtually no trucks or automobiles built exclusively in America using American workers and US made parts. The one company that comes closest is Tesla.

The supply chain for the tens of thousands of parts that go into a typical vehicle includes products from virtually every industrialized nation. Even cars that most believe are “American Made” are merely assembled here using parts sourced from almost every semi-industrialized country in the world. General Motors also builds many of its vehicles in Mexico. Why Trump has chosen to target Ford and not GM remains a mystery.

Last week, Trump waded in to the fray even deeper by falsely bragging on Twitter that he singlehandedly prevented Ford from closing an entire assembly plant in Louisville, Kentucky and moving production from thereto Mexico. That was a lie. Unbeknownst to Trump, Ford has contracts with the United Auto Workers. Those contracts require the company’ to negotiate with the United Auto Workers before closing any plants or laying off workers.

What Ford did propose to do was move production of the slow selling Lincoln MKC to another plant — either in Michigan or Mexico — so it could increase production of the hot selling Ford Escape. Not a single American job would be lost, a fact that Trump was apparently unable to comprehend. Ford says it is in constant contact with the Trump transition team. When it mentioned about moving MKC production, the Trump camp went ballistic and created the plant closing story to fit its own delustional view of the world.

The dysfunctional tango between Trump and the car companies will continue as long at The Trumpter is in office. All of them are dancing a little jig right now as they contemplate lower corporate tax rates, a reduction in or elimination of CAFE rules, and a big increase in infrastructure spending by the federal government. They prefer not to think about the coming hard times predicted by Morgan Stanley as the transition to electric vehicles continues. The investment banking house issued a report last week that forecasts much lower industry profits in the years ahead.

The US auto industry has been complaining that it cannot produce small cars at a profit since the Kennedy administration. There actually is a way that car companies could build small, efficient automobiles profitably in the United States but it would mean cutting workers’ wages by 80%. If that happened, the only people applying for work in those factories would be Mexicans and other immigrants. Oh, wait. Trump’s head just exploded!

Trump uses bluster and bullying as a substitute for leadership. Any improvement in the US economy over the next four years is more likely to occur because of good management decisions than his bombastic meddling.

 





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About the Author

I have been a car nut since the days when Rob Walker and Henry N. Manney, III graced the pages of Road & Track. Today, I use my trusty Miata for TSD rallies and occasional track days at Lime Rock and Watkins Glen. If it moves on wheels, I'm interested in it. Please follow me on Google + and Twitter.



  • Eco Logical

    Trump reminds me of a kid throwing a tantrum … he says and does outrageous things to get attention … I’m mystified by how this actually worked? I’ve heard that many Americans are considering moving to Canada because of Trump. I welcome Americans to my country but I have another idea, the states that voted against Trump can join up with Canada! I believe the western states (California, Oregon, Washington) all voted against Trump as well as the northeastern states. If we joined together we could surround the central states that voted for Trump and preserve NAFTA with a direct connection between BC (British Columbia) and Mexico via the western states 🙂

    • Steve Hanley

      I believe this map accurately represents your thoughts. BTW, I am totally fine with this. https://uploads.disquscdn.com/images/980f1def24fb7a9b8028354ab688ab6c96a9e18feb959cf06fe9f9a7cd9111d7.jpg

      • Eco Logical

        Wow! Thanks Steve! I like it a lot! How did you do that map so fast? There must be a lot of other people (North Americans) thinking like me 🙂

        • Steve Hanley

          Stole it from a Facebook post that popped up on my screen last week. Here in New England, we are starting to talk about NExit. In California, the movement is called CALexit.

          It’s odd, you know. For every dollar California sends to the federal government it gets back a measly 78 cents. All those red state in America’s so-called Heartland are sucking on the public tit.

          They carry on and on and on about slackers and takers, but they are the worst offenders.

          The other thing about California is that it has the most regulatory burden of all the states, the toughest environment laws and the highest taxes on the wealthy. But where do companies like Tesla, Atieva, Faraday Future, Karma, and Fisker locate?

          Yup, you guessed it. Cali-for-ni-ay. Weird, huh? California is responsible for 1/6 of America’s gross national product. Canada could do worse than add an economic powerhouse like that to its national structure.

          • super390

            In theory, the USA could have said goodbye to the Confederate States in 1860 and war could have been avoided. But this would have led to a further fragmentation of both countries every time there was a dispute, leaving the continent a weakened mosaic like Latin America or the Balkans. Worse, 4 million Americans would still be treated as animals in the slave states, and the refusal of abolitionists in the North to accept this would have led to further conflict, arms smuggling, terrorism, and guerrilla warfare. Southerners were past the point of rationality about slavery.

            Any conflict between us vicious enough to accomplish what could not be done then, the breakup of our country, would not be solved by the breakup. The borders we can’t control now would be multiplied many times over. With the Internet, conspirators could organize without even meeting each other, money could travel in an instant, cybersabotage would become the norm. Vengeance increasingly stalks our land.

            And now, instead of the problem of 4,000,000 of us in chains, letting the far-right states have absolute power over their residents means 100,000,000 people of color in danger of 2nd-class citizenship, 150,000,000 women reduced to the subservience of a century ago, tens of millions of LGBT citizens living a life of fear. Besides the likely resulting economy, a wretched throwback of resource extraction and export with zero environmental controls producing more pollution and CO2 than the entire current USA. 3rd World banana republics always place the special interests of the oligarchs over economic progress, just as the Jim Crow South refused to progress past cotton and tobacco because its rulers had to be protected.

            As in 1860, if we flee or if we try to take our little liberal enclaves with us, the terrorists have won. I refuse to let them claim that they are the only real Americans.

          • Steve Hanley

            A most excellent disquisition, sir. Well done!

          • Antony Berretti

            You could always join with the old mother country?
            Second thoughts, no, we have Trumpitis here as well now.
            I happened to watch a French documentary last night about the Einstazstruppen (spelling?) WW2, Trumps ideas about business are not far off how this organization ran. Ford can n tango with him, but who is going to pay the price?

          • Eco Logical

            Since I live in western Canada I’ve spent a lot of time (months ~ years) in the western states including Montana, Washington, Oregon, and California. I have found that I/we western Canadians have more in common with western Americans than we do with some of our own. I can’t speak for the rest of Canada but I’d love it if the western & NE states joined Canada. Call it CALexit and/or Wexit & NExit or ? What can I do to help?

  • trackdaze

    4years? 2 tops.

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