How Appropriate: Fiestas Made in Mexico

Will the Ford Fiesta one day come from Mexico?content_ford-fiesta-frozen-white-styleeco

According to our colleagues over Automotive News, Ford announced plans to build a small-car assembly plant in Mexico. The investment of $1.6 bn will entail 2800 new jobs by 2020. Not everyone is happy. At the same time, the future manufacturing plans of Ford’s Michigan assembly plant are unclear. The production of the Focus and C-Max at the plant will stop in 2018. The President of the UAW union is worried that this means that the Mexican plant will be replacing the Michigan plant and that the Mexican investment is at the expense of US auto workers.
What Automotive News does not report is that perhaps Ford’s European workers might be worried too, as the investment south of the US border might mean the importation of Mexican Fiestas to Europe. Conceivably some Focus cars that might have been made in Europe may be sourced from Mexico instead. Part of the justification for setting up in Mexico is to avail of lower labour rates and less onerous labour and environmental regulations; the easier conditions help to improve the profitability of the smaller cars.

Historically, small cars means small profits. The high wages of the US are probably not that attractive to Ford when it comes to vehicles at the smaller end of the spectrum. Something similar applies in Europe where increasingly the production of small cars is moving to areas outside the core EU: Poland, Hungary and further afield. Perhaps in 2021 we can get Fiestas with Mexican VIN codes.

Author: richard herriott

I like anchovies. I dislike post-war town planning.

15 thoughts on “How Appropriate: Fiestas Made in Mexico”

  1. The President of the UAW is right to worry, although whether he also took the time to reflect on how the historical practices of his union have precipitated this state of affairs, I doubt it. As much as I am in favour of unionised working, the generous healthcare and retirement benefits afforded to UAW workers is a burden American automakers cannot bear. That does not make the big corporations right, of course; it is the whole system of American healthcare generally that is wrong.

    1. How did the US car industry get to where it is on healthcare? The answer to that goes back to a decision taken by US industry as a whole to package healthcare in with work pensions instead of supporting a national health system. For reasons I can´t remember this idea terrified the US business community and they wanted control over it by having health provision dealt with as a worker/employer matter. You´d have imagined that farming that risk outo the state would have been the obvious choice. I read an article about it years ago. Sorry I can´t be more precise.
      As years go by I am getting more bolshie on the subject of unions. Yes they have their hazards but so do the employers. I stop now….

    2. The problem is that business and labour forget their symbiotic nature. In an ideal world, both should work together to their mutual advantage. But of course it hardly ever works out like that. Anyone familiar with the British motor industry will know how militant unions and inflexible working practices can lay waste to the very jobs they were supposed to protect. Conversely, the idea of “maximising shareholder value” peddled by Thatcher and her kin is a kind of virulent hyper-capitalism that serves no other purpose than to satiate a stock market whose thirst can never be slaked. Finding a third, less dogmatic approach seems to have eluded us thus far.

    3. I’m doing my best not to be the patronising Kraut here, but I must state that the IG Metall union played a major role in German manufacturing remaining relatively unscathed during the darkest hours/years of the financial crisis. That really was an exemplary case of state, union and employers working hand in hand. Without this agreement (which mostly revolved around reduced hours paid for by the government and ideally combined with training courses in exchange for deferred mass redundancies), an awful lot of know-how would have been lost, not to mention the ensuing social turmoil and incapability to eventually get production up and running again swiftly.

      The then-head of IG Metall, Berthold Huber, was also the one to force Martin Winterkorn to step down in the autumn, by the way. More power to men like him.

    4. Kris, that is the way it should be: capital, labour and government, working together to achieve a common goal, i.e. crushing the rest of the EU.

  2. the small profits brought by compact cars surely have something to do with moving production south of the Rio Grande. then you can build more American muscle, from trucks to Mustangs to Lincolns, at U.S. plants. if your Ecosports come from India, Mexican products won’t be traumatic.

    the Fiesta saloon that is currently sold in Brazil comes from Mexico (the hatchback is locally built). not a great car, nor a big deal: Ford ran no piece of ad featuring mariachis, guacamole, tequila shots, spring breaks in Cancun or stuff like that.

  3. Chris & Kris: the German case was in the back of my mind as alternative approach.
    Britain’s appalling industrial relations say more about the unique class divisions that pertained than they do about organised relations. Without reading a library on the topic, my assumption is that neither the unions nor management understood the firms they worked for as a shared enterprise.

    1. I also suspect there was a degree of outside influence at play. Whilst no direct influence has even been proven, many union leaders were in an ideological thrall to Communism and it was certainly in the Soviet interests to foster unrest.

  4. Not car related, but still … In 1971 President Nixon proposed a national single-payer health care system similar in principle to the UK’s NHS. The idea was shot down by the American Medical Association’s lobbyists, not by manufacturers’ lobbyists.

    Every time one of my doctors — at my age having more than one is, for those of us who can afford any, typical — complains to me about the horrors of working with all those insurance companies I tell him to stop griping at me and go bother his trade association. Our doctors got what they thought they wanted.

    About the evil UAW. It is a union. Unions are legal. Employees may club together to negotiate with employers for more good things, e.g., pay, better working conditions, … , and fewer bad things, e.g., time spent working, … That’s unions’ job. Management is allowed to negotiate with unions for more good things (from management’s perspective), e.g., lower pay, worse working conditions, longer hours of work, … That’s part of management’s job.

    What happened in the US auto industry is that the unions did their job and management didn’t do theirs. The problem isn’t unions, its management.

  5. Richard, my perspective on what killed Nixon’s health care proposal may be biased. In ’71 I dated a nurse (local childrens’ hospital emergency room). When she had nothing else to talk about she reported what the MDs she worked with were saying about evil President Nixon and the terrible things he was trying to do to them. And to their incomes. Nowadays when the subject comes up my general practitioner (primary care physician in our jargon) starts cursing the specialists who run AMA and whose interests aren’t at all aligned with those of humble GPs.

  6. Hey, Ford has been making the Fiesta in Mexico since 2010 at Cuautitlán Assembly anyway, so this new unnamed factory they’re opening which is freaking Trump out is really for making the Focus.

    Ford has had a big Mexican plant in Mexico since 1986 called Hermosillo. It knocked out Focuses from 1988 till 2002 for the US and Canadian markets, then turned over to Fusions around 2005.

  7. Hate to throw cold water on the title but Fiestas are currently (and have always been) made in Spain where I believe they speak Spanish.

  8. Very true – but the pedantic could probably wriggle out by saying that the demotic language of Valencia is the regional form of Catalan.

    1. True, Festa might have been a more appropriate name for the Fiesta.

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