Memo To Trump: Blame Obama, Not Ford, For Small Car Shift To Mexico

Investors Business Daily ^ | 9/30/2016 | Editorial

[expat_panama]

Industrial Policy: Donald Trump has been bashing Ford for deciding to shift small car production to Mexico. He's pointing the finger of blame at the wrong target. A big driver behind Ford's move is President Obama's push for tougher federal fuel mandates.

Earlier this year, Ford (F) announced that it was building a major small-car assembly plant south of the border, and more recently said it was going to shift all its small car production to Mexico within a few years.

Trump has called it an "absolute disgrace" and says he'd hit Ford with a 35% import tax on these Mexican-built cars.

For its part, Ford claims that there won't be any loss of jobs, since the U.S. plants making small cars will start making bigger cars. But the simple truth is that the new jobs that will come with Ford's new small-car plant won't be domestic. That's still a loss of jobs.

Whatever you think of Ford's decision, one largely overlooked factor behind it is Obama's push for more stringent federal fuel economy standards...

...tougher CAFE standards raise the cost of a new car. A Heritage Foundation analysis found that Obama's higher standards are adding roughly $3,800 to sticker prices.

Obama's standards come up for review next year, which gives the auto industry, and politicians who have a smidgen of common sense, a chance to end this madness.

In the meantime, Trump should stop threatening Ford and direct his populist rage where it belongs — at Washington, D.C.

[expat_panama]

While Obama gets a pass everyone wants to blame the mess on everyone/everything but O.  Blame NAFTA.  Blame the Fed.  Sometimes I'd like to believe it'a a sinister conspiracy of trolls on these threads but the misdirection is everywhere.  Anyway this "blame Ford" nonsense has got to stop.

Related: U.S. government says it lost $11.2 billion on GM bailout

[DaveA37]

Makes no difference who Trump “blames” for moving small car mfg. to Mexico, the idea of taxing the crap out of any of those vehicles coming IN to our country will be fine with me, I’m not going to buy one.

[NonValueAdded]

Don’t forget the unions’ contribution.

[Theodore R.]

Apparently, the American people are so much for Obama that won’t accept truth about this matter.

[lilypad]

A friend just bought a new infinity. When she stops at a red light the engine turns itself off to “save gas”. I heard a lot of the newer cars have this feature in order to achieve the fuel saving mandate. The hell with the wear and tear on the starter I guess.

[mazda77]

Whether they are built here or there, they still have to pass the same cafe standards.

[cba123]

I think Ford and all the rest of the companies sending US jobs overseas deserve every bit of criticism they receive.

All of them.

[rellimpank]

—so you would prefer that they go broke here and close their doors?

[4rcane]

stop giving trump bad advice. Obama is leaving, blaming him is pointless. Blame hillary or ford

[Cboldt]

Trump is describing a proposed economic policy, and of course companies will act in their self-interest, as they should.

He contrasts his proposed policies with those in place, including regulatory edicts that make business relatively difficult to conduct in the US.

The fact that Ford and Carrier are acting in their own self interest is used to "bring the point home" to voters.

Trump blames the current policies on self-serving globalists, not on the companies that act in their own self interest, although to the extent the companies lobby for the policies, they deserve a share of the blame.

[TwelveOfTwenty]

I think Ford and all the rest of the companies sending US jobs overseas deserve every bit of criticism they receive.

I would agree, but a recent survey showed that most Americans choose lower price over the "Made in USA" label. The companies are stuck with either moving their manufacturing out of the country, or losing business to those that do.

Any resurgence in American manufacturing is going to have to start with consumers.

[vette6387]

“The hell with the wear and tear on the starter I guess.”

Do you get UPS deliveries? Their drivers shut their trucks down any time they stop to make a delivery. I guess they have heavy-duty starters, because if you treated your car like that, the starter would overheat and fail in short order.

[vette6387]

“Any resurgence in American manufacturing is going to have to start with consumers. “

Any resurgence in American Mfg, will have to start with the abolition of the unions. Domestic automakers management long ago capitulated to these a$$holes to the point where they have to add $20 per direct labor hourly cost to cover the union-driven “legacy costs.” The foreign automakers who now build cars here don’t have that burdensome overhead. They have management who can see where they will go if they let the UAW get a toehold in their factories. They truth is their domestic competiturs have plants in Mexico already. Ford is simply “late for the train.”

[Adder]

True. I would guess Ford thinks it will save the difference between the cost of meeting CAFE and US wages, by using cheaper Mexican labor.

[Eric Pode of Croydon]

The United States, via EPA/OSHA/NLRB/EEOC, our corporate tax rate, and Obamacare, has effectively told American businessmen "We don't want you here".

I'd move my factory to a country that showed me that I was wanted, too. And sleep like a baby afterward.

[Quality_Not_Quantity]

I may have my facts wrong, but my understanding is that they’re going to build more highly-profitable trucks in the US plant that formerly built the small, less profitable ones.

I don’t know that any US worker is losing a job over this.

[expat_panama]

 

It's a lovely October morning traders and everything's coming up roses!  Last week ended w/ stocks clawing back up almost a % in mixed volume and this morning futures see 'em at +0.65%.  They got metals up also, +0.22% although pm's are still sqatting on long term support levels.

 Today's entertainment includes:

10:00 AM ISM Index
10:00 AM Construction Spending
2:00 PM Auto Sales
2:00 PM Truck Sales

--and:

How Hillary Plays Class-Warfare Card - Stephen Moore, Washington Times
Trump's Unrealistic Vision of Growth - Robert Samuelson, Washington Post
Trump v. Clinton: A Clash of Economic Visions - Zachary Karabell, Politico
OPEC Quota Not Guaranteed to Push Up Price - Tom Stevenson, Telegraph
It Finally Happened: Politics Has Ruined Everything Fun
Comey Should Resign. But He Won't.
How Fair Is Paying Your Fair Share?

[trebb]

If they were paying attention, they would know that Trump blames Obama’s anti-business tax and regulatory policies for companies going away....Ford just happens to be the latest in a string of them and made a good example.

[Tucker39]

I’m not going to buy one, or any other Ford model or any other USW trash. Sell ‘em in Mexico! Probably Toyota.

[taildragger]

" may have my facts wrong, but my understanding is that they’re going to build more highly-profitable trucks in the US plant that formerly built the small, less profitable ones"

Yes and if my memory is correct during negotiations the UAW spilled the beans as too what it is.

Ford will Americanize what is now an outside the US product, the Mid-Sized Ranger Pickup, and via the beans spilling is the will make a "Bronco" variant of it. So... Wayne Assembly that now makes the Small cars will not loose jobs, they will build something different.

BTW I have seen factory cars here in MI ( The Ranger ) running around, good looking Truck. I can't imagine how cool ( true 2 door, or 2 door plus 1/2 door like the Toyota FE's and Honda Elements? ) the New "Bronco" might look...