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well, as usual the article’s reporting is misleading and almost useless:

but from the article there is a single fact. ford’s mgmt thinks:

1. selling 50,000 units is min for them to choose to make the car here. otherwise, they’d rather close a plant and fire all their workers and not make the car. thus, although American workers are already screwed in either case, now American consumers will be denied this car as well (we could argue that chinese goods are so substandard that that might be a sort of blessing but let’s assume not). so one would think from Ford mgmt claim that they can’t “make it” here...

but why?

analysis and deduction from one fact above:

2. from the predicate that they need to sell 50000 here to make it here, it must be that Ford could make a per unit profit here with American workers. thus current ford mgmt must have a total amount of profit or a percentage profit per unit in mind apriori that is a go no go decision for them. clearly they can predict the cost of each unit here or in cheap labor china.

3. since they would make the car in china at that 50000 number it must be that they can make the car for higher unit profit there.

4. thus ford’s profit per unit here is not enough for them. they would rather kill a particular line of cars (i.e., that business) here rather than make a profit with American workers in this case.

5. ford mgmt therefore must have set a min acceptable (to them) profit on the whole number of cars they think they can sell here. thus they have a minimum return on investment that they believe must achieve, otherwise, it’s not worth it to them to lift a finger here.

well, if i’ve got that right (this is quick reasoning on a single fact, maybe there’s something i haven’t judged right or don’t know), now the question is why? why do they believe that?

could it be that they can command the highest stock prices and lowest interest on loans if the make the maximum profit in china? perhaps they want to maximize ford’s profit (and thus their personal profit and stocks) while minimizing the companies risk and investment and thus cover their own butts with minimal risk themselves. that is, minimize both short term and longer term risk (American worker benefits).

but they love the upside of selling into American markets. they want to make a kingsize profit off American consumers, while giving nothing to American workers.

but...

American workers == American consumers

given my analysis from the one fact in the article, i have some questions for you—current Ford mgmt:

1. does greed for maximum alone rule you? otherwise. will you punish both American workers and American consumers even though you could make money here, just not enough money?

2. does short term gain rule you? do you care nothing about the fact that unemployed American autoworkers will have no money to buy your chinese cars, eventually?

3. does highest monetary profit have to trump all possible profits?

i say crank up the tariffs on any car Ford tries to import here, Mr. President. single them out.

[does greed for maximum alone rule you? otherwise. will you punish both American workers and American consumers even though you could make money here, just not enough money?]

It’s not a matter of greed. It’s a matter of the UAW. UAW shops lose money on small cars. Detroit is currently doing well off trucks because Japan hasn’t quite caught up yet. Detroit’s truck reliability is superior to its own small cars because there’s enough margin in trucks for Detroit to not water down parts quality to the same extent it has for its small cars. Without the UAW, Detroit would have a shot at kicking Japan’s butt in small cars. But even in its diminished form, the UAW remains like boa constrictor wrapped around the collective windpipe of the Big 3, causing Detroit to have to choose between profits and reliability.