Ford Motor Co. recently announced they will be investing in a new production plant in Mexico. (read about it here)
This move has taken some serious heat lately by those who believe Ford should have invested that money here and kept those jobs in the US. After all, Henry Ford himself very successfully implemented a plan that paid his workers high wages so that they could afford to buy the vehicles they were producing, therefore increasing the demand for Ford vehicles.
Contrasting opinions believe Ford is just making a smart business move to increase efficiency, as every good business does. (Read about it here)
What are your thoughts on this recent move by Ford? Would you do the same thing and invest in Mexico? Or would you keep the jobs here in the US?
Even though it is controversial for companies to outsource their work, from a business standpoint, it makes sense because it can directly lower costs for Ford. This reminds me of the article that I published last week about the worker in Mexico that earns half of what an American employee made and was very happy to do so just because he had a good job! It doesn't help either that the U.S. government is placing all kinds of regulations on shipping out of country and the with the possibility of raising wages in America, I think it was a good move for Ford, from a cost reduction standpoint.
ReplyDeleteThe particular plant is for small car production and it makes sense to move to a location where this type of car is in higher demand. Several American companies have plants outside of the US, so to make a big deal about a plant in Mexico would be unwarranted.
ReplyDeleteNo one has rights to blame Ford. Before talking about public economic welfare of Ford's investment, Ford has free rights to decide for their business purposes. This enterprise is a private firm that seeks profits, not a government agency that must contribute its nation. Therefore, in the perspective of businessman, investing in Mexico where has lower wage would be legitimate.
ReplyDeleteI agree with what everyone is saying. When looking at this from a business standpoint this will definitely increase their profits. They do not have to pay the workers as much and employee rights and safety standards are not as high.
ReplyDeleteI also want to bring up the fact that Trump's wall to Mexico will not stop the Mexican's from taking our jobs (if that is what he is worried about). This exact thing will happen with many companies and the thing that Trump is trying to eliminate will actually come true and he helped make it happen.
As everyone else said, I think Ford has made the best choice for itself. Ford is a for-profit company which has no duty to create jobs in the US at the cost of higher wages and where its object is profit-maximization, nothing else. If Ford gets to make losses by building a plant in US instead with higher wages and low performance in sales, who will be responsible?
ReplyDeleteFord itself has to find its way out and I believe such decision was just a typically rational decision to meet its objective.
If anything, Ford can contribute to the US by making great small cars and turn its sales into massive profits so that it can pay more taxes, which will be redistributed through the government.