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Ford Sees Sales Soar After Moving Production from Mexico to Ohio

Ford Sees Sales Soar After Moving Production from Mexico to Ohio

Ford hits the reverse gear for good profits and even better PR.

https://www.youtube.com/watch?v=3dzmMo5h9zo

Legal Insurrection readers may recall that Professor Jacobson featured Michael Moore clearly predicting the outcome of last week’s vote: “Trump’s election is going to be the biggest Fuck You ever recorded in human history. And it will feel good.”

A reminder worth checking again, in light of Moore’s prediction.

Moore recounted a meeting that President-Elect Donald Trump had with the executives of Ford Motor Company, threatening tariff hell if they moved jobs to Mexico. According to Moore, this was “music to the ears of the people of Michigan, Ohio, and Pennsylvania and Wisconsin.”

Indeed! Analysis has shown that Trump’s “War with Motor City” was a key reason for his win.

…In Michigan, the epicenter of America’s auto industry, Trump won a state that hadn’t supported a Republican candidate since George H.W. Bush in 1988. The Republican nominee also took Ohio, the second-largest car producer among the 50 states, with relative ease. A similar story played out in Indiana, whose vehicle production is slightly ahead of Kentucky this year.

Overall, the seven states that have manufactured the most cars so far this year all lined up behind Trump: Michigan, Ohio, Indiana, Kentucky, Alabama, Tennessee and Missouri.

It was apparent that Trump’s message resonated with voters who work in manufacturing….

Perhaps sensing that the country may be heading in a new, anti-globalist direction, Ford shifted the production of a line of trucks from Mexico to Ohio in mid-2015!

Ford’s [F-650 and F-750 medium-duty commercial] trucks which used to be built in Mexico started rolling off an assembly line in Ohio this week.

That’s good news for the 1,000 Ford workers in Ohio, who might have otherwise been out of work.

It’s also good publicity for Ford (F), which has been under fire for investing so much in Mexico. In April, the automaker said it would invest $2.5 billion in transmission plants in the Mexican states of Chihuahua and Guanajuato, creating about 3,800 jobs there.

To say that their line subsequently had a successful sales year would be an understatement, as sales of medium-duty trucks soared :

https://marketrealist.imgix.net/uploads/2016/09/3-29.png?w=660&fit=max&auto=format

 

It would be heartening to see Ford and other manufacturing firms return to this country, inspired by profits instead of threatened by tariffs.

Donald Trump once remarked that the 1990’s sure aren’t like the 1980’s. I sure hope this is a sign that our businesses realize that our President is serious about business, and that Trump will work to ensure that the remainder of this decade is nothing like the 8 years that have preceded it.

 

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Truly incoherent, Leslie.

    Not very difficult to understand. Shifting back to the US was a good strategy for ford.
    These companies and their lobbyists made oodles of cash and the American worker got screwed.
    The progressive movement proved to be just a greedy bunch of liars who care nothing for the average American. Even Bernie Sanders the progressives progressive, who probably never had a real job outside of government seems to have come out of his losing run for president very well off.

      Ragspierre in reply to Jackie. | November 16, 2016 at 11:26 am

      “Shifting back to the US was a good strategy for ford.”

      But there’s no rational tie to WHY it was a good strategy. Ford quite easily may have found that the American workers in Ohio could be least cost, and THAT would have jack diddly to do with “globalism”.

      Leslie’s piece is disjointed rah-rah T-rumpism that makes no logical economic sense. In fact, her piece is self-contradictory.

      And…for the record…mid-range truck buyers are not subject to PR in their buying decisions. These are commercial trucks, bought by people who’d BETTER be buying them for sound business reasons.

      Cripes…

        gmac124 in reply to Ragspierre. | November 16, 2016 at 5:34 pm

        I agree. If shifting back to Ohio had driven sales of these trucks where was the advertising about it? There wasn’t any because they just finished refitting the factory and started production this week. In other words increased sales and the change in where they are being produced have no effect on each other at this time. If this happened next year maybe.

        McAllister in reply to Ragspierre. | November 16, 2016 at 7:56 pm

        Agreed. A manufacturing shift from one location to another isn’t done overnight. The change to Ohio was decided before 2015. I’d like to think this was due to Trump, but it wasn’t.

Ford still moving to Mexico
Ford Motor F -0.46% CEO Mark Fields said on Tuesday that the automaker would proceed with plans to shift production of its Focus small car to Mexico, a move that drew fire from Trump during the campaign.

Thanks for posting Leslie! Excellent

Wow Trump is already bringing manufacturing back before he’s sworn in. Like YEARS before. Them’s some super presidential powers!

If “sales” equated with “profits” this would be fine and dandy. But of course the equation is not only false, it’s downright silly.

The costs of producing anything in the US are simply appalling. I doubt that anybody not in some industry which actually tries to do it can understand the expenses. It’s traditional to blame “the American worker” or, more plausibly, “the Unions” for the ridiculous expense, but the major costs are imposed by the government—endless licenses, OSHA regs in encyclopedia-sized manuals, and, above all, taxes, taxes, taxes, on anything and everything. Even taxes on the taxes. And they all add up to colossal sums. I can get damn good industrial or consumer parts made in Mexico or India or Poland at a tiny fraction of what it costs to make them here, and that includes duties and shipping.

The numbers tell all. Without the numbers, the story tells nothing.

    inspectorudy in reply to tom swift. | November 16, 2016 at 1:33 pm

    You may think you are getting “Damn good parts from Poland, Mexico and China” but I can assure your not. They may work for a while and they may actually fit but they are not the same as the OEM parts. I used to be a Porcheaholic and worked on them for fun. I realised that many VW parts were the same piece although much cheaper than the Porche part. It turns out that Porche Magna fluxed every part BEFORE labelling it a Porche part. That’s because a Porche can easily go over 150 mph and be subjected to racing conditions where as the VW is a city cruiser. I recently bought a new tailgate latch from Ebay for my Chevy Avalanche. I put it in and on the first pull of the handle it broke! The entire part looked the same but the metal was thinner and there were no strengthing creases in the metal. The other part of your argument that nothing can be built in the US any longer unless it is very expensive is BS. If we keep going the way we have the last twenty years, there will be no one who can afford anything but Asian flip flops. We have given up on manufacturing and it will dawn on us one day when we are at war with China that we bought all of our military equipment from them! The notion of the extreme capitalists that we should always buy from whoever makes them the cheapest, will destroy or country.

      Ragspierre in reply to inspectorudy. | November 16, 2016 at 2:30 pm

      Silliness…

      1. American manufacturing output is at an all-time high

      2. We build what we have an economic advantage to build…we’ll never again build buggy whips except as novelties

      3. Your Porche parts are not built in the US (or they are, because we can build them cheaper…see BMW, Stihl, etc.)

      4. I’m as “extreme” a capitalist as you’ll ever meet, and I’m not your intellectual inferior, which means I buy for value, not “cheapest”

      5. One BIG factor in keeping our standard of living (much more important than “wage numbers” growing has been our ability to source goods and even services from all over the world…you or I could not afford a smart-phone made exclusively in the US…which are often of very high quality and value

      6. If not for the competitive forces from imported cars and motorcycles, Detroit and Milwaukee would still be making crap

      Markets innovate, use resources MOST economically, and raise the standard of living for EVERYONE.

      BIG GOVERNMENT RUINS. And it makes no difference in whose hands BIG GOVERNMENT exists.

        Smells like gas lighting. Sounds reasonable though.

        And then I remembered how your election analysis got everything backwards.

          Ragspierre in reply to Fen. | November 16, 2016 at 4:26 pm

          It’s SOOOOOOO odd that you haven’t been able to name anything, innit, troll?

          Are we DOOOOOOOOOOOOMED, Hysterics Boi?

          When are you linking up with the OccupyWhatever bois, and raining down fire and death on the GOPe, liar?

          What you’re smelling is your bung-sucking mouth.

Economy through proximity. Local wealth purchases goods and services locally. This could realized temporarily replaced with redistributive change (e.g. perpetual smoothing functions, progressive debt/leverage), but it is sustainable through economic development and employment, and mitigates the recurring catastrophic anthropogenic economic implosions.

When fuel prices are low, sales of Trucks and SUVs go up and sales of cars go down. This is true across makes and models. http://autoweek.com/article/car-news/people-will-buy-10-million-trucks-year

    Ragspierre in reply to Mark1968. | November 16, 2016 at 2:12 pm

    There are also about a baker’s dozen other factors that make more sense than “the truck was built in Ohio”, like pent-up demand and aging fleets that businesses were holding onto during the Obamic Decline.

    Another BIG factor is that Ford may have appreciably upped its game, since some of their main competition in this class of trucks comes from foreign-made trucks which have been known for their quality and reliability, and for years Ford big trucks were crap.

One aspect of this is that Ford discontinued making the light truck Ford Ranger in 2010 because its popularity was cutting into the higher profit middle and large Ford trucks. Loyal Ford truck buyers had no choice but to buy middle-sized Ford trucks or bigger. Middle-sized trucks bought in 2011-2012 would need replacing about now. Gas prices can also affect which size vehicle a customer buys, but maybe not so much with trucks because even the small four cylinder Ford Rangers only got maybe 20-22 mpg.

To dovetail with what Tom and Rudy were saying…. why do materials seem more perishable than when I was young? Is it a personal bias? I just seem to remember products my grandparents bought in the 70s being much more durable and of higher quality than today.

Bought a new cell phone last month. Dealer wanted me to but additional insurance, to cover replacement if it went bad in the first six months….

Six months? Its a brand new product. If it fails in the first six months, I should be able to replace it for free.

    Ragspierre in reply to Fen. | November 16, 2016 at 4:35 pm

    Your grandpa’s cell phone he bought in the 70s was WAY superior to the one you bought.

    Did he use it to call your daddy at the Supreme Court?

    (That one just NEVER gets old…!!! Heh…!!!)

      Rag: “Your grandpa’s cell phone he bought in the 70s was WAY superior to the one you bought.”

      Obviously, I’m not talking about cellphones in the 1970s. I’m talking about appliances, automobiles, shoes, clothing, etc.

      “Did he use it to call your daddy at the Supreme Court? (That one just NEVER gets old…!!! Heh…!!!)”

      Not sure what your joke is. But I do appreciate you reminding everyone that you slimed my dead father in some petty attempt to score cheap political shots. People might forget what you are and move from contempt to pity.

      You are supposed to be smarter than this. Oh well.

    CloseTheFed in reply to Fen. | November 16, 2016 at 5:33 pm

    To Fen:

    In the 60s and 70s, for example, home telephones were built like tanks (I have a AT&T which is surely actually a western electric wall phone). The reason was that At&T owned the phones and the subscribers just rented the phones, so if anything went wrong, AT&T had to send out a repairman to fix it. They didn’t want to send out repairmen!!!! So the phones were built extremely durably.

    Typewriters were very well built too, and I imagine one reason was because manufacturers had not yet mastered making thin, light durable materials, so typewriters were very heavy and the parts lasted forever. In the 1960s, I learned to type on a 1940s manual typewriter.

    Cars were also heavier before EPA CaFe standards. Mfgrrs. weren’t trying to make things so light (and cheap) that things wore out. Of course, car bodies were in some ways more durable, but because of carbuerators, points, distributor buttons and other non-solid state components, they were not nearly as reliable as automobiles of today. Points used to drive me CRAZY!!

    Same thing with furniture; particle board wasn’t a thing yet in the 60s, so furniture was typically well built because they didn’t know how else to do it. As they figured out shortcuts things got worse. Cheaper, more annoying, but cheaper.

“So what you’re telling me is that your product is so crappy that you can’t guarantee it will function for 6 months? Forget the insurance, why would I want to buy your goods to begin with?”

    Mark1968 in reply to Fen. | November 16, 2016 at 6:17 pm

    Those insurances are a waste of money (and almost all profit for the store, that’s why they push them). Solid state devices either fail quickly, while they are still under warranty, or they last a long time.

    Ragspierre in reply to Fen. | November 16, 2016 at 6:21 pm

    You don’t comprehend pricing.

    The risk of warranties is including in the price of the phone or it isn’t, making the phone appear more attractive to price shoppers.

Not to pile on or anything, but the picture attached to the story is not an F-650 or F-750.
Still, I am glad to see autos and trucks built here, so that Americans can get good blue collar jobs. Not everyone is cut out to be a computer nerd.

Why does anyone give any attention to Rays…he is so unhappy and just wants to spew hate and negativity.

    Ragspierre in reply to gonzotx. | November 17, 2016 at 11:27 am

    Since when is insisting on logic and a working knowledge of Economics 101 “hate and negativity”?

    Oh. Right. You are a T-rump supporter. Never mind…

What Leslie didn’t say was that Trump went to visit UAW workers in the rust belt and sold them a bill of goods about automakers moving jobs outside the US. But the big shrink in vehicle production resulted from poorly run, union-dominated (thus inefficient and overpaid) plants in Detroit’s heyday.

American-made vehicles were rust-buckets in three years, so obsolescence alone kept the fires burning until the Japanese arrived. Then the five-foot-high contracts made profits impossible so overproduction became the management mode – which made year-end sales discounting popular among consumers.

When the other shoe dropped and government could no longer prop-up the automakers, the new Obama czar, with the help of a Federal bankruptcy judge and a Democrat congress put the whole mess on the backs of taxpayers. It was called a bail-out. Banks got even more of the newly-printed greenbacks. And then there was the infrastructure spending that ended up in the pockets of government employees.

Now the production capabilities in the remaining automaker plants have 50 times better efficiency having chopped hundreds of thousands of jobs in favor of robots. Trump can’t change that so his 25 million high paying jobs in ten years by returning jobs from outside our boundaries was a concocted lie to attract dummies. It worked. We are also going to get more infrastructure money so we can start all these shovel-ready jobs where the first shift digs holes and the second shift fills them back in again.

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