On Thursday, Donald Trump made the claim that Ford was going to cut all U.S. jobs and move its operations to Mexico, and as a result he would charge them a large tax for doing so.
“They think they’re going to get away with this and they fire all their employees in the United States and…move to Mexico,” said Trump. “When that car comes back across the border into our country that now comes in free, we’re gonna charge them a 35% tax. And you know what’s gonna happen, they’re never going to leave.”
The Ford corporation’s CEO, Mike Fields, wasn’t taking that lying down, and appeared on CNN to correct the record.
“It’s really unfortunate when politics get in the way of the facts,” he told Poppy Harlow. “And the facts are, Ford’s investment in the U.S. and commitment to American jobs has never been stronger. I mean, we’ve created more than 28,000 jobs in the U.S. in the last five years.”
But the truth of the matter is, Ford has brought jobs from Mexico to the U.S. recently as Yahoo Finance reports.
Ford began producing the F-650 and F-750 at its assembly plant near Cleveland a year ago after the company spent $168 million converting the factory from building Econoline vans. They previously had been produced in Mexico in a joint venture with Navistar International Corp. known as Blue Diamond Trucking Co., which disbanded in 2014. The automaker now builds its full-size van, known as the Transit, at an assembly plant in Claycomo, Missouri.
The company is focusing on building high-margin trucks, vans and sport-utility vehicles in the U.S., where labor costs are more expensive than in Mexico. Ford derives most of its profit from its F-Series truck line, Morgan Stanley has said. And the largest vehicles in the line generate the biggest return, according to analysts. By going it alone in the big-truck market, Ford no longer has to share profits with Navistar.
According to CNN Money, that’s not all. Ford has increased its job count in the US by 50% in the last five years. Furthermore, while it has moved it’s big truck production into the U.S., they say they will continue to make their small car product here as well, despite moving some of it to Mexico. In fact, the cars they’re producing in Mexico are their less popular, and less profitable models.
So it would appear that Trump’s bluster about Ford is nothing but a cheap way to score outrage points, and put on a show for voters concerned about the job market. In truth, no one is losing any jobs, and Ford is likely going to end up adding more. The reason for Ford moving the production of these cars in the first place is to make room for more profitable ones to be made there in the U.S. factories instead. This will only result in more profit for Ford, which means more production, and more jobs.
For a guy who seems concerned with keeping jobs in the U.S., Trump seems to be wanting to stand in the way of more being created.