There was certainly plenty of big news breaking yesterday. If you tend to follow politics closely you no doubt saw most of it coming out of Wisconsin, but the rest of the world was still grinding along in its normal fashion. One bit of non-election news came out of the HQ of Ford Motor Company when they announced that they were building a new factory… in Mexico.
If that headline immediately gave you a sinking feeling that the story wasn’t going to remain on the pages of Popular Mechanics you’re not alone. The political implications are obvious in a season when more and more voters are looking skeptically at free trade policies and the decline of blue collar manufacturing jobs in the United States. Donald Trump jumped all over the story at once, calling the decision a disgrace. You can expect Bernie Sanders to weigh in on it soon as well. Joann Muller, writing at Forbes, asks what the company could possibly have been thinking in terms of the timing.
Perhaps Ford Motor is tone deaf. Why else would it choose Primary Day in Wisconsin, a hard-working Rust Belt state where trade agreements and labor rights are sore subjects, to announce that it plans to invest $1.6 billion for a new factory in Mexico?
It’s not like the announcement wasn’t expected. Ever since Ford announced last July that it would end small car production at a Michigan factory that been supported by $5.9 billion in federal loans for fuel-efficient cars, it was inevitable that a new, lower-cost factory would pop up south of the border.
But today’s plan, which will create 2,800 new jobs for Mexican workers, will surely feed into anti-trade messages from Trump and Democrat Bernie Sanders in this hotly contested presidential campaign.
In an update to the article, the author notes that Ford responded to them, saying the timing was tied to the need to begin construction on the new plant promptly. That strikes me as a rather odd answer, since I’m unaware of any legal requirement governing the timing of press releases for such things. But hey… it’s Ford game and they’ll have to deal the cards as they see fit.
This announcement most certainly does play into the hands of both Trump and Sanders. Call it “populist” if you like, but many Americans have long since taken to ignoring all of their betters in politics who assure them that the decline of American manufacturing and the trading of middle class jobs on the auto assembly line for minimum wage jobs assembling Quarter Pounders with Cheese is in their best interest.
It’s also not just the Republicans who are having this debate. Organized labor – supporters of the Democrats who have endorsed these trade deals in equally hearty fashion – are feeling the heat. But as Dale Buss notes in a companion article to the one above, big labor is really getting just what they asked for and deserve.
Well, this is really rich. UAW leadership knew very well that the extra financial padding they reached for with their intransigence in contract bargaining last fall was going to reach back and slap them in the keister.
That’s because Detroit Three executives communicated very plainly that it would, and because the union nearly explicitly agreed during that season to sacrifice thousands of jobs making small cars in exchange for short-term financial gain and for the guarantee that UAW members would be able to continue making all the high-profit, hot-selling trucks and SUVs that General Motors, Ford and Fiat Chrysler can sell while the good times continue rolling in the American auto market.
We’ve written about this here before and Buss is correct: this shouldn’t come as a shock to anyone. UAW has been fighting over scraps while ignoring the long game for the last few years. The two tier wage system in Detroit, dividing new workers from their much better compensated, old school union colleagues, has fomented dissent among the ranks. It also pretty much ensured that Ford, as well as their competitors, would take more and more work to places where labor was significantly cheaper.
And now those same unions will have to go out and hit the campaign trail yet again, pouring money into the campaign of Hillary Clinton, who is promising more of the same. Will the unions be able to turn out the vote for her when they are as much a part of the problem as the auto manufacturers are?