Trump aside, Ford and other automakers have already moved to Mexico
Ford was never going to move an entire plant, but the production of one model. Still, such a move would have been but a blip on the map of the global exodus of car manufacturing to Mexico.
In a move that was widely criticized Friday morning, President-elect Donald Trump on Thursday night took credit on social media for convincing Ford to keep a Kentucky plant put, instead of moving it to Mexico. Such an accomplishment would have burnished the anti-trade reputation of the future president.
It wasn’t the plant – which employs 4,700 people – that Ford was going to move, but the production of the Lincoln MKC, a sport utility vehicle.
But even if MKC production had moved south, zero American jobs would have suffered, according to the United Auto Workers union, which represents Ford workers, and last year negotiated with the Dearborn, Mich. automaker to invest $700 million in the Louisville plant over the next four years, reported the Detroit Free Press. Ford had planned to replace MKC production in Louisville with the Escape SUV.
Still, the MKC is staying in Louisville; it’s unclear if that will impact production of the Escape there.
“Today, we confirmed with the President-elect that our small Lincoln utility vehicle made at the Louisville Assembly Plant will stay in Kentucky,” the company said in a statement, according to The Washington Post. “We are encouraged that President-elect Trump and the new Congress will pursue policies that will improve US competitiveness and make it possible to keep production of this vehicle here in the United States.”
Despite the change in the MKC's plans, Ford has said that it plans to move all North American production of its smaller cars from the US to Mexico. There, cheap labor and the country’s extensive trade relationships (which make exporting from Mexico cheaper than from other parts of the world) have made it a hub of global manufacturing in the 22 years since the North American Free Trade Agreement (NAFTA) negotiated trade among the US, Canada, and Mexico. Ford’s US plants will continue to make the company's larger, more expensive cars, which are more cost-effective to make here.
And while Mr. Trump has singled Ford out as a trade boogeyman, criticizing the company for moving US jobs to Mexico – where his own clothing line is made – all other automakers are doing the same. Over the next decade, almost every major automaker will be producing some cars in Mexico, including General Motors, Ford, Toyota, Honda, Volkswagen, Audi, BMW, Hyundai and Mazda, according to an analysis by the Free Press.
The wave of investment by 2015 had turned Mexico into the seventh-largest producer of cars in the world and the fourth-largest auto exporter after Germany, Japan, and South Korea. Employment in Mexico’s auto sector has shot up 40 percent over the past decade, as international companies have poured $7 billion into the country. The United States saw a 15 percent increase in the same period.
Trump has promised to reverse these trends by renegotiating NAFTA and other trade deals in order to bring back American jobs. Some economists, however, are skeptical that this will meaningfully stimulate the economy. They blame automation, not trade deals, for the manufacturing job losses.
Manufacturing output in the US is actually at an all-time high, as the Monitor has reported, worth $2.2 trillion in 2015, up from $1.7 trillion in 2009. The jobs are becoming increasingly skilled, though, and companies complain that they have trouble finding qualified or interested US workers for positions that don’t require a college degree, but at least some formal training.
“The gap is between the jobs that take no skills and those that require a lot of skill,” Rob Spohr, a business professor at Montcalm Community College near Grand Rapids, told the Monitor’s Simon Montlake in June. “There’s enough people to fill the jobs at McDonalds and other places where you don’t need to have much skill. It’s that gap in between, and that’s where the problem is.”
According to the National Skills Coalition, a Washington-based career-training advocacy group, the need for workers in middle-skilled jobs in the US will remain one of the economy’s most pronounced in the near term. Indeed, the US Bureau of Labor Statistics data show a surplus of bachelor’s degrees in the workforce, while moderately skilled positions languish.
Some labor experts and economists call on the federal government to expand funding for technical skills training to close the jobs gap. It is unclear yet whether Trump supports that idea.