One of the cornerstones of Donald Trump’s campaign has been the fact that millions of jobs have been lost to overseas industries because it is often too expensive to do business in America anymore.Many liberals have criticized Trump for these statements, but the Wall Street Journal recently reported that Ford’s latest production move showed that Trump was exactly right.
Ford planned to build a new assembly plant in Mexico in order to produce 500,000 more vehicles in Mexico than it currently does. Last year Ford’s Mexican output was 433,000 vehicles, which translates to about 14 percent of its total production in North America.
This deal had not been publicly confirmed and a Ford spokesperson simply stated, “We do not comment on speculation,” when asked about the company’s plans for Mexico.
Ford to open a new plant in Mexicohttps://t.co/Hbo0QekNbp— FOX & Friends (@foxandfriends) February 8, 2016
Mexico has become a serious competitor in the car-making market with “low wages, improved logistics and an arsenal of free-trade deals,” the Wall Street Journal explained.
If the report proves true, Ford will join a long line of auto dealers making the pivot to Mexico, including BMW, General Motors, Volkswagen, Toyota, Honda and Kia.
This shift is only expected to grow because the United Auto Workers labor union recently struck a deal to increase wages for U.S. factory workers, making domestic production just that much more cost-prohibitive.
As wages in the U.S. go up, Mexican wages stay the same, and it therefore becomes even cheaper to do business with Mexican factory workers as opposed to American laborers.
The UAW insisted that auto companies don’t need to run to Mexico because they can afford to pay their workers high wages.US wages go up and Ford sends more production to low cost Mexico. https://t.co/rzhXJllpWH— Steven Rattner (@SteveRattner) February 8, 2016
“They’re making huge amounts of profits,” UAW President Dennis Williams stated. “There is no reason mathematically to go ahead and run to countries like Mexico, Taiwan, Thailand and Vietnam.”
Trump has long advocated making deals with foreign countries that aren’t as one-sided as those currently in place. If foreign market places weren’t so attractive, companies would remain in America and employ Americans, helping to reduce the unemployment rate, boost the economy and reduce welfare and other expenditures.
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