President-elect Donald Trump has taken public aim at Ford and General Motors for moving production of some of its vehicles to Mexico in recent years. But this campaign by the incoming President is fraught with hypocrisy based on his own business dealings, as well as the irreversible global nature of manufacturing today.
Earlier this week, Ford reversed a decision to invest in a big expansion of its Mexican plant, a move highly criticized by Trump during the campaign. Ford, though, made the move after a decision to reduce its forecast for sales of small cars that would have been built in Mexico, and to make its Flat Rock, Michigan plant, which builds the Mustang, more efficient and productive. Nevertheless, the Trump camp is taking credit for strong-arming Ford into the move, though Ford denies that Trump’s criticism had anything to do with the move.
Trump’s focus on trying to compel companies to relocate jobs to heartland states he carried, and prevent them from further out-sourcing of jobs is probably going to be a pillar of his Presidency. How successful he is at delivering real incremental job or wage growth remains to be seen (and it will have to be analyzed relative to the impact of Obama policies since Trump inherits an almost full-employment economy and wage growth as it is) with a free-trade oriented Republican Congress that does not share his protectionist rhetoric.
But where vehicles are assembled is only part of the picture when it comes to auto manufacturing jobs.
The global-supply reality of today’s automotive industry can be found in Cars.com’s most recent “American Car” Index, which resulted in just eight American cars being on the list in 2016. This is down from nearly 30 cars as recently as 2011. Adding to both the reality and irony is the fact that for the second consecutive year and sixth time overall, the Kentucky-built Toyota Camry topped the list.
“After reaching an all-time low of just seven cars on the 2015 American-Made Index, this year’s list is up one car, but still remains much smaller than earlier indexes, when the list included nearly 30 eligible cars,” said Patrick Olsen, Cars.com editor-in-chief. “The reason for the shrinking list continues to be the globalization of today’s automakers. While building the same car for all markets is better for an automaker’s bottom line, tracking just how American a car is has become more difficult because so few meet the criteria for our index,” said Carlson.