From the Wall Street Journal stolen in its entirety:
"Ford to Shift Work Abroad
Car maker to end U.S. production of Focus sedans as demand for small cars fades
The auto industry’s attempt to build small cars profitably in the U.S. has hit a pothole.
Ford Motor Co.
said a Michigan factory that assembles its small Ford Focus and
C-Max wagon will end production of those vehicles in 2018 in a new
setback to efforts to create a market for small cars made in the U.S.
Production of the Focus will be moved outside the U.S.
could put pressure on the United Auto Workers union to temper demands
for wage increases in upcoming contract negotiations. Ford, General Motors Co.
and Fiat Chrysler Automobiles
NV, although profitable, are struggling to keep pace with
lower-cost Asian auto makers that now have the added advantage of weaker
currencies compared with the U.S. dollar.
Small cars like the
Focus deliver far lower profit margins than the pickup trucks and
sport-utility vehicles the Motor City is best known for, but they are
essential to helping car makers meet stringent fuel economy mandates.
makers won concessions from the UAW before and after the financial
crisis to dramatically lower labor costs. Those agreements helped usher
in a return of U.S. small car production. GM now makes the subcompact
Chevrolet Sonic in Lake Orion, Mich., and Ford its Focus in Wayne, Mich.
Ford’s Michigan Assembly Plant, which employs 4,400 workers, builds
gasoline, electric and hybrid versions of the two cars. It previously
built light trucks and SUVs there and the decision to shift to the
smaller vehicles was helped by gasoline that once cost $4 a gallon. Ford
earlier had split production of the Focus between factories in Michigan
In a statement, the nation’s second-largest auto
maker said it is “actively pursuing future vehicle alternatives” for the
Wayne facility. Its Focus is popular around the world and built at
plants in Germany, Argentina, China, Vietnam and Thailand. It is unclear
where the next generation U.S. models will be built.
Fiesta subcompact cars sold in the U.S. are built in Mexico, which is
becoming a production hub for global auto makers. Tens of billions of
dollars in new production capacity is underway or planned in Mexico.
Auto makers hope to leverage the country’s low labor costs and a
patchwork of global trade deals that make exports easier.
Toyota Motor Corp.
is shifting production of its Corolla compact to Mexico in coming
years after three decades of building it for North American customers in
Canada. Honda Motor Co.
last year began shipping its compact Fit to the U.S. from Mexico and Mazda Motor Corp.
is now building its Mazda 3 and Mazda 2 small cars there.
loss of Focus production move deals a blow to the Obama
administration’s attempt to encourage U.S. auto makers to make more fuel
efficient vehicles domestically. Government-backed programs, including
billions of dollars in Energy Department financing lent to Ford and
Treasury Department bailout funds given to GM, helped pave the way for
more U.S. small car production.
But low gasoline prices have
punctured U.S. demand for small cars and led many companies to run
small-car factories well below full capacity. An underused assembly
plant burns large amounts of cash.
Ford received a $5.9 billion
U.S. loan commitment to retool 11 factories in five states to deliver
fuel-efficient technologies. The loan was credited with creating or
saving 33,000 jobs and covered hundreds of millions of dollars’ worth of
work performed to convert the Wayne, Mich., plant from SUVs such as the
Lincoln Navigator to constructing small cars, electric vehicles and
Earlier this year, Ford outlined plans to lay off 700
workers at the Wayne plant. GM and Fiat Chrysler also have slowed
small-car production at several plants with more buyers choosing small
crossovers and compact SUVs.
Bill Johnson, a UAW official at Ford’s Michigan Assembly Plant,
said in a memo the outsourcing of the small car line will be a central
topic in coming negotiations, noting that the union’s lead negotiator
“has our back on this issue.”
The UAW enters negotiations with
the Detroit Three aiming to win higher pay packages amid what has been a
trend of annual profit-sharing checks that auto makers prefer over
fixed increases. As Detroit car makers’ profits increase, union members
have grown increasingly discontent with a wage scheme that pays
entry-level workers about $19 an hour, or $9 less than workers hired
before the financial crisis.
While the roughly $57-an-hour wage
and benefit costs Ford spends per UAW worker is less than the $75 an
hour it was spending a decade ago, it is still between $8 and $20 an
hour higher than Honda or Volkswagen AG
, according to Ann Arbor-based researcher Center for Auto Research.
Write to Christina Rogers at email@example.com and John D. Stoll at firstname.lastname@example.org"
And to think, Greensboro, Randolph County and the State of North Carolina are still planning to spend upwards of $120 Million Dollars to "attract" an automaker to a megasite that is years away from being built in a state that is 20 to 40 years away from having the rest of the necessary infrastructure in place. Before we can attract any automaker to North Carolina we must have steel mills, more automotive parts manufacturers, more tire manufacturers, port facilities capable of handling new automobiles and rail facilities capable of hauling double decker rail cars. North Carolina doesn't have those things in the places they are proposing to put auto manufacturers and it will take 20 to 40 years and $Billions of tax dollars to put it all in place.