Ford Cancelling Mexico Plant, Invest $700 million in MI expansion instead

CNBC ^ | 1/3/2017 | CNBC

[rb22982]

Ford canceling plans for $1.6 billion plant in Mexico, investing $700 million in Michigan expansion instead

[editor-surveyor]

Lets say that Obama’s brothers set off a nuke at a major shipping hub, and 2 million people have to evacuate.

The power goes down almost instantly, obviously.

The electric cars longest possible range will be less than half of what is needed, so they begin to drop out and block the highways, slowing and eventually completely blocking the major highway arteries.

Huge numbers of occupants of those electric coffins get left to starve, freeze, or whatever.

Masses of people can’t get through the dead coffins that block the highways.

What would your solution be?
.

[VanDeKoik]

He has bigger issues to deal with at the moment.

Best that just applauds the good news and not try to get cute.

[editor-surveyor]

.
>> “obolas green shoots” <<

Avocado suppositories???
.

[DoughtyOne]

Good one...

[Alberta's Child]

1. They can sell the Mexican-made Focus for $18,000 and make more money than they make on a US-made Focus that is sold for $20,000 -- while selling more of them to meet the stupid EPA regulations.

2. Without the regulations, they can now produce them anywhere because they don't care if they sell 300,000 of them or 30,000 of them.

[Hugh the Scot]

"They can sell the Mexican-made Focus for $18,000 and make more money than they make on a US-made Focus that is sold for $20,000"

When that happens, I'll apologize for calling you an idiot.

[central_va]

I think you don't know how much it costs to build a car. I will tell you, on average it takes 30 man-hours to build one car. Focus is smaller so maybe 25 man-hours. Labor in the USA is expensive so at $60.00/hr it costs $1,500.00 per car. In Mexico Labor is $3.00/hr. SO the labor bill per vehicle is now $75.00. So there is a $1,425.00 difference per vehicle. Regulations and taxes are paltry compared to the labor difference.

[Windflier]

Unions will fall by the wayside...right for their time....but their time has passed.

As an ex Teamster, I couldn't agree more.

[12th_Monkey]

I liked some of his sci-fi, but I’ve never seen that quote.

[12th_Monkey]

God I hope that witch doesn’t run in 2020.

[12th_Monkey]

of course. Pigs evolving to fly has a better chance.

[Alberta's Child]

It won't happen, because they're counting on not having to sell 300,000+ Focus models.

Here's the question nobody seems to be asking ...

If they are renovating and updating a plant in Michigan for $600 million instead of building a new plant in Mexico for $1.6 billion, why did they ever consider opening the plant in Mexico in the first place?

I'll tell you why I think this is the case (and this is an opinion that is not a professional one but is more than wild speculation): The Michigan plant is going to be smaller and produce fewer cars than the Mexican one. And the reason for this goes all the way back to my first post. Ford would be perfectly fine selling 30,000 Focus cars next year -- or even discontinuing the line completely if they could convince all those customers to buy Fusions, SUVs, trucks, etc. Up until now, the EPA wouldn't let them do this. With Trump's election they are likely convinced that the EPA will be changing its tune dramatically.

[Alberta's Child]

I never suggested that the expense of regulations and taxes had pushed Ford to open the plant in Mexico. Others on this thread may have said that, but not me.

My point was that EPA regulations that effectively mandate minimum numbers of unit sales for compact cars is what pushed Ford to open the plant in Mexico.

Here's my dumb question for you ...

If Ford can save $1,425 in labor costs for each Focus they produce in Mexico, then why are they canceling the plan to open the plant in Mexico?

[datricker]

No, No, No this is all wrong don't you know we are supposed to be pounding the drums of war - so we can nuke Russia or some such nonsense!

Sentiments along these lines seem to be what is passing for cogent thought among the establishment - the contrast between what is important for the country is Amazing.

For the establishment - more American money, more American lives to be squandered down the rat hole that is the mideast and rapidly E.U too.

Versus:

A president doing the work of the American people helping the American people work.

Well its clear that option two is obviously racist.

Even as a supporter of his since 2015, I have to admit that this is nothing short of astonishing to behold.

We've been lied to for so long and had crappy sellout leadership going to the other extreme is causing a bit of whiplash, and anger.

So many needless deaths in now pointless wars because of these globalists who have sold America out. Cowards hidding behind crony capitalism,or progressive fantasys - So bad

Seeing leadership with true free market enterprises operating - Americas back baby!

[Vigilanteman]

I hope she does just so all her wailing that “But I won the popular vote” will cease. They can push her around in a wheelchair and make all the FDR comparisons they want. I’d love to see a rematch!

[central_va]

In this particular case both GM and Ford are preemptively putting on a little show, a ruse, to make it look like the offshoring is over now. Carrier did their little dog and pony already. It goes something like this: See we moved a plant to the USA and stopped another one. Nothing to see here move along. Donald you can leave us alone now.(to continue to offshore ). We've given you enough political cover.

What they don't want is an actual tariff. That they are deathly afraid of. So they are playing games, before the inauguration, and throwing crumbs out there to the nationalists and Trump. Like Caesars political enemies would throw roses at him at every parade and then plot to kill him behind his back.

It ain't going to work. There is a new sheriff in town and he is going to make these globalist pay for de industrializing the USA and putting us at risk.

[Hugh the Scot]

"If they are renovating and updating a plant in Michigan for $600 million instead of building a new plant in Mexico for $1.6 billion, why did they ever consider opening the plant in Mexico in the first place?"

I believe it's because, based on the annual sales numbers you provided, a razor thin estimated margin, and the labor-rate difference between Mexico and Michigan; Ford's profit from the sale of the Focus would increase from approximately $405,000,000 to approximately $639,000,000 annually.

It would be fantastic if the stupid EPA mileage standards were excluded from the cost consumers are asked to pay, but based on what I'm seeing from Ford, and from Trump; this doesn't look to be moving the needle.

My understanding also, is that the Michigan plant already exists... That expansion and renovation (perhaps re-tooling) costs are $600 Mil. all-in.

I'm unconvinced that, even considering CAFE standards, Ford is currently selling the Focus at a loss.

[lonevoice]

So much winning! I heard on the news that Ford’s stock ticked up with the announcement.

[Alberta's Child]

I don’t disagree with any of the numbers you’ve presented there. My point is that nothing about those numbers has changed in the last two weeks, two months, or two years. So Ford’s business decision here is obviously tied to something other than the capital and operating costs, labor costs, and any other financial considerations related to the locations of the two plants (Mexico vs. Michigan).

[bus man]

My solution would be to push the cars with the drained batteries over onto the shoulders of the highways, thus getting them out of the way.

What you are describing is an emergency evacuation scenario, which is not applicable to 99.99% of the population on 99.99% of the days. Is it really practical to ban a technology that has the potential of reducing our dependence on the oil that’s supplied by Obama’s brothers, in deference to a very small likelihood of trouble?

Not to mention, in a mass evacuation scenario like you describe, conventional fuel supplies would soon be exhausted as well in the affected areas. This is exactly what happened when Houston had to evacuate in the face of Hurricane Rita, and they had several days of warning to get ready.