Ford now has a plant in Dearborn, Michigan. Some will insist that Ford’s strategy is necessary to cut costs and maintain profitability in a cooling, low-margin segment, or will defend the automaker by pointing out that it’s still very much committed to USA production.
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“Over the next two to three years, we will have migrated all of our small vehicle production to Mexico”, CEO Mark Fields said at an investor conference in Detroit on Wednedsay, assuring investors that his company maintains a healthy profit margin in its pickup truck and van business.
Ford Motor Company is by no means the only automaker moving production of small cars to Mexico.
The union has indicated the shift to Mexico is not likely to have a meaningful impact on US employment. But it also puts Ford and the industry back in the political crosshairs.
Why is Ford moving to Mexico? Fiat Chrysler, for example, announced earlier this year it was also moving its small-car production out of the US and into Mexico, leaving behind its larger Jeep and Ram brands. Those vehicles carry much higher profit margins than for small vehicles.
Ford has finally confirmed that its entire line of small cars will soon be built in Mexico.
Mark Fields, the CEO of Ford Motors declared that the migration is because the company is looking forward to cutting the production costs.
Ford will “fortify” what it calls its “profit pillars”: trucks, commercial vehicles, SUVs, and performance vehicles.
At a visit to the Knotty Tie Company in Denver in early August, Clinton noted that Trump-branded ties, suits and furniture are made in China, Mexico and Turkey, respectively.
As part of its annual Investor Day presentation, Ford detailed its earnings expectations for 2016 and 2017 and gave some general expectations for 2018.
As part of contract negotiations with the union, the MI plant will be getting two products yet to be announced, she said.
But it is aggressively investing in emerging opportunities, including the electrification of its vehicle fleet and the development of autonomous cars.
Ford shares have fallen 12% from the beginning of the year from $14.09 to Tuesday’s closing price of $12.38. The Free Press and other media outlets have previously reported that Ford plans to bring the Ranger, a midsize pickup it builds in other parts of the world, to the USA and might bring back the Bronco SUV nameplate.
SUVs will allegedly still be made on homeland soil, as they are among the better-selling vehicles due to their spacious interior and off-road abilities.
That’s a sea change in thinking for a company that until recently was mostly thought of as a builder of cars and trucks. “We all recognize there is a huge problem in Mexico”.
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“It’s about global competitiveness, because as a company we have to be competitive”, he said.
