Presidential hopeful Donald Trump recently gained infamy for referring to illegal Mexican immigrants as “rapists” and “murderers” (but some of whom, he thinks, are good people). His comments — made at his presidential campaign kickoff, none the less — sparked an avalanche of dropped contracts and media deals from within his empire, from everything to the Miss America pageant on NBC to losing a world-class chef at one of his hotel locations, and to his golf courses missing out on events with the PGA.
Trump’s vitriol was aimed at the influx of illegal immigrants pouring into the U.S., but his stance on the country is unfavorable for another reason — that Mexico is quickly filling in the slot that China occupied in the 1990s and early aughts, that is, becoming a source of cheap exported labor thanks to trade agreements that encourage U.S. companies to shed expensive American workforce in favor of cheaper Mexican manpower. Trump is an asshole, but buried under his provocative and needlessly callous stance on the country is a legitimate point about the loopholes that companies like Ford are taking advantage of.
Ford recently discussed the decision to move the production of its quick-selling Focus compact and not-so-quick-selling C-Max hybrid from Michigan to Mexico, by 2018. The company is in talks with the UAW regarding the move. Though it’s not firmed up yet, many see it as a possible bargaining ploy to win more favorable conditions from the unions.
Seeking Alpha notes that while most major automakers have increased their capacity in Mexico recently, it’s been Canada that has bared the brunt of the production shifts. But whether Ford decides to move or not, it highlights the ease at which a deeply-seeded American company can quickly scuttle its American-based workforce in favor of better financial terms abroad.
It appears that the nuanced argument for closing loopholes in America’s international trade agreements are lost on Trump, but a more coherent opposition has been illustrated by the outspoken stance against the Trans Pacific Partnership that Vermont Senator Bernie Sanders has taken. Though President Obama has hailed the TPP as a positive for American economic activity, opposition from within his own party is stemmed from the same concerns that are playing out as a result of NAFTA and illustrated by Ford’s willingness to pick up and move out. Close loopholes and invest in American labor first, Sanders says, and shut down incentives for companies to get a better deal on manpower elsewhere.
Oddly, Sanders and Trump might actually agree on that aspect, though they present (and would go about) it differently. Ford has prided itself on hiring thousands of Americans and investing on American soil (evidenced by its recent opening of a tech and R&D center in Silicon Valley), but the allure of cheaper labor for products that can command the same prices is almost too good to pass up. That’s a drain on the American economy at a time when we need to be plugging holes, and Ford is only one of many taking advantage of such lax labor export rules.
The UAW, for its part, is showing an optimistic willingness to ensure that production of the models stays States-based. “We are extremely confident that a new product commitment will be secured during the upcoming 2015 negotiations and that the Michigan Assembly Plant will maintain a full production schedule,” it said, per Autoblog.
From upstarts like Tesla to our greater independence from Saudi oil, America has a lot going for it. There’s a lot of promise that can be made good upon in the coming years, but a lot of that hinges on keeping things based here. Though the jobs market has firmed greatly since 2009, it’s standing on a layer of ice that doesn’t have the glacier formed below it just yet. Encouraging companies to export that labor now is a step backwards strategically. Recent situations in Greece and China have shown us that we can’t always rely on the globalized market. Sometimes, we just need to do things ourselves.