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Ford Moves C-Max, Focus Production To Mexico

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On: Fri, Jul 10, 2015 at 3:33PM | By: Carl Malek

Ford Moves C-Max, Focus Production To Mexico

In a move that is sure to make the company's impending negotiations with the UAW more interesting, Ford has revealed that it will shift production of the Ford Focus and Ford C-Max from Michigan to a plant in Mexico

It is currently unknown why Ford made this decision, but the company did release a statement to theDetroit Free Pressthat officially confirmed the move stating, "We will move production of the next generation Ford Focus and C-Max, which currently are built at Michigan Assembly Plant, beginning in 2018."

One possibility that could've led to the company's decision is the sharp sales declines that both models have posted recently. June was a particularly bad month for the duo, with Focus sales posting 16 percent lower than before while C-Max sales were down by 15.6 percent when compared to previous sales figures. The C-Max in particular has proven to be a slow seller here in the U.S. mainly due to its availability only as either a pricey Hybrid or an all-electric Energi variant that is even more expensive. Regardless of the company's motives, it appears that Ford has gained a crucial piece of leverage for negotiations with the UAW and the issue could be a key feature of the company's talks with the workers union.

Despite this shift, Ford has no plans to close the Michigan Assembly Plant which is home to roughly 4,000 workers revealing that it is exploring new vehicle alternatives to the Focus and the C-Max which are the only vehicles made at the facility. Ford's new release added, "We are actively pursuing future vehicle alternatives to produce at Michigan Assembly and will discuss this issue with UAW leadership as part of the upcoming negotiations."

The move also highlights the recent growth that the automotive industry has seen in Mexico in recent years with a extensive list of automakers establishing manufacturing bases in the country. According to a report released by the Mexican Auto Manufacturers Association, production of cars and light trucks increased by a whopping 14 percent during the first quarter of the year with this number expected to further increase in the near future. This growth has also caused concern in some parts of the U.S., especially in the South where the region's advantages in terms of cheaper taxes and subsidies is threatened by the savings offered by a location in Mexico.

In addition to Ford, General Motors and FCA will also meet for talks with the UAW regarding workers contracts which were last inked four years ago and expire later this summer. Back then, all three companies claimed that going back to the "old ways" that played a role in the 2008-2009 financial crisis created a potential threat to their bottom line. Profits and sales have recovered since then, and, as a result, union leaders are expected to vigorously push for the reversal of several bitter concessions including pay caps as well as the controversial two-tier wage system. In response, the American "Big Three" could use Mexico as a formidable bargaining chip to defeat the union's efforts at reversing these concessions.


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