Labor costs

The accounts from CNBC and the Wall Street Journal report that Ford will increase the number of cars and trucks made in Mexico from approximately 250,000 per year to roughly 750,000. Both news outlets pointed the finger at the high cost of union labor in the US.

They cite numbers from the Bureau of Labor Statistics showing that American workers cost the company five-times as much as Mexican workers. Three months ago, Ford signed a labor deal with its UAW employees that according to the Detroit Free Press, raised their average pay from $47 to $56 per hour.

Fuzzy numbers

Here’s a trick question – how many Ford cars and trucks are manufactured in the United States each year?  That’s difficult to answer for two reasons. One, the company only reports the number of vehicles manufactured in each continent. In the case of North America, the number is 2.9 million, just under half of all the Fords made in the entire world annually.

The other problem is that cars and trucks aren’t made in one spot anymore. The parts are made in different factories and then shipped to an assembly plant in a separate location all together. And unfortunately, ‘American made’ cars like Ford are no longer American-made.

Made in USA

According to the most recent results of Fortune Magazine’s annual list of American made vehicles, there are only seven cars or trucks actually made in the USA. And none of them are Fords. To qualify as being ‘American made’, at least 75% of the vehicle must be manufactured in the US.

Forbes 2015 list of American-made vehicles:

1. Toyota Camry

2. Toyota Sienna

3. Chevrolet Traverse

4. Honda Odyssey

5. GMC Acadia

6. Buick Enclave

7. Chevrolet Corvette

Expanding globally

The exodus of Ford jobs from America to other countries isn’t a surprise. An announcement from the company three years ago laid out the corporation’s plans for growth. Ford executives confirmed the opening of 14 new manufacturing plants around the world between 2011-2015. None of them are in the United States, or even North America for that matter.

New Ford factories (from Ford.com):

2011: Ford Sollers Elabuga Assembly Plant – Russia

2012: Ford Sollers Naberezhnye Chelny Assembly Plant – Russia

2012: Chongqing #2 Assembly Plant – China

2012: Craiova Engine Plant – Romania

2012: Ford Thailand Motors – Thailand

2013: Chongqing Engine Plant – China

2013: Nanchang Assembly – China

2014: Camaçari Engine Plant – Brazil

2014: Chongqing #3 Assembly Plant – China

2014: Chongqing Transmission – China

2014: Sanand Assembly Plant – India

2014: Sanand Engine Plant – India

2015: Hangzhou Assembly – China

2015: Ford Sollers Elabuga Engine Plant – Russia

It’s interesting to note that the popular Ford F-150 pick-up truck was made in the USA. Forbes made a special point to note that the vehicle fell off their list of American made automobiles last year because it suddenly stopped qualifying as American made. Regardless, the company proudly pointed out recently that it has expanded its F-150 production in Kansas City and Dearborn by adding “900 new workers” and “500 new robots”.

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