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Reshoring talk takes back seat, as auto industry continues to expand operations in Mexico

Clare Goldsberry

April 8, 2016

2 Min Read
Reshoring talk takes back seat, as auto industry continues to expand operations in Mexico

With the economy, free trade bills and manufacturing jobs all on the front burner of the presidential race this year, U.S. OEMs continue to expand operations in Mexico. The most recent announcement came from Ford Motor Co. on April 5: It plans to boost its small car profitability by investing in a new plant in the state of San Luis Potosi, Mexico.

The company will invest $1.6 billion and create 2,800 additional direct jobs by 2020. Construction on the new facility will begin this summer, with new small cars—possibly including the Focus—expected to start rolling off the line in 2018, said Ford’s announcement.

While manufacturing in Mexico is nothing new for Ford—this is the company’s 91st year in Mexico, where it has been manufacturing vehicles since 1925—the announcement comes at a time when the continued practice of taking manufacturing out of the country and moving high-paying jobs for Americans to lower cost manufacturing areas is a large part of the national debate.

Obviously, the United Auto Workers union doesn’t think much of this plan, either. A Bloomberg article ("Ford’s Plan for Mexico Plant Draws Criticism From Trump, UAW"), quoted UAW President Dennis Williams, who called the plan “very troubling,” as the investment will create jobs in Mexico that “should have been created right here in the U.S.A.”

Republican front-runner Donald Trump has been critical of companies taking jobs to Mexico, calling the plan “an absolute disgrace” in a statement issued to various news outlets.

PlasticsToday has published numerous articles about the booming automotive manufacturing sector in Mexico, so these types of investments shouldn’t be surprising.

On the flip side, if Ford were to build that factory, say, in Michigan, could it actually find 2,800 employees to take those jobs? There have been a number of comments from manufacturing analysts lately who doubt that, even if U.S. OEMs were to build large-scale factories in the United States, they would be able to find enough workers to staff them. With the labor participation rate at 63%, it would seem that we should be able to find employees to get the country back on track in manufacturing. But the millennials, the only population demographic that is larger than the baby boomers, don’t seem to be hankering after manufacturing jobs; instead, many seem to prefer barista positions at Starbucks.

Ford pointed out in its release that during the past five years, it has invested more than $10.2 billion in Ford facilities alone in the United States in addition to the company’s $2.7 billion in facilities and supplier tooling in Spain, $2.4 billion in Germany and $4.8 billion in China—all part of the company’s plan to serve global markets and deliver profitable growth.

Give Ford credit—at least it’s trying to spread the wealth around and the United States is getting some share of that.  However, this “reshoring” ship is going to be very difficult—if not impossible—to turn around.

About the Author(s)

Clare Goldsberry

Until she retired in September 2021, Clare Goldsberry reported on the plastics industry for more than 30 years. In addition to the 10,000+ articles she has written, by her own estimation, she is the author of several books, including The Business of Injection Molding: How to succeed as a custom molder and Purchasing Injection Molds: A buyers guide. Goldsberry is a member of the Plastics Pioneers Association. She reflected on her long career in "Time to Say Good-Bye."

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