Will the Ford Fiesta one day come from Mexico?
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.