Donald Trump Hits Ford Over Mexican Factories. Here's Where He's Wrong — And Right

For as hard as Donald Trump is running for president, you could be forgiven for thinking he was running against Ford.

Throughout his insurgent campaign, Trump has repeatedly attacked the idea of automakers exporting jobs to Mexico while importing cars, specifically Ford. That line drew applause when he deployed it in Michigan on Tuesday, saying he’d be the only president who would would stop Ford from building a new factory in Mexico:

“So Ford is building a $2.5 billion plant in Mexico. In Mexico? How is that good for us?,” Trump said at the event. “I said to myself, its no good…I actually gave them a good idea. Why don’t we let the illegals drive them through the border? Save them a lot of money. That will be next…

“I’ll say I don’t like this deal, it’s no good for our country, I will do everything I can…My only question is: Do they move the plant in the United States in the same day or a day later? We’ll end up with a plant in the United States and we’ll create jobs.”

This line might not play so well in Avon Lake, Ohio — where about 1,000 workers just today starting building new versions of the Ford F-650 and F-750 medium-duty pickups. That’s because those trucks used to be built at a Ford plant in Mexico, but were shifted back to the United States thanks to a deal between Ford and the United Auto Workers union. It’s the only case of an automaker moving work into the United States from Mexico in recent years.

But Trump has a point, even if his focus on Ford is too sharp. Eight automakers have either revealed plans for new plants in Mexico or built expansions of existing ones in the past two years alone, including Toyota for Corollas, Audi for Q5 SUVs and Nissan and Mercedes-Benz for luxury cars. Yes, Ford is building a $2.5 billion engine and transmission plant, but that follows General Motors’ announcement last December that it would spend $3.6 billion expanding and upgrading its four Mexican plants.

The big drivers for Mexico — wages that start around $8 a hour and trade deals with the rest of South America — have been hard to match in the United States. Since Volkswagen built its Tennessee factory in 2011, no automaker has finished a brand-new U.S. assembly plant; the drought was broken earlier this year when Volvo announced plans for a factory in South Carolina. And trade statistics bear out the shift; for the first six months of 2015, the United States imported $35 billion more in cars, trucks and auto parts from Mexico than it shipped south, a new high. Of the top 10 best-selling vehicles in the United States, six are either assembled in Mexico or can be sold with Mexican-built engines.

So Mexico is taking jobs that belong here, right? Well, not exactly.

This chart shows the pattern in U.S. automotive manufacturing jobs since 2000. That steep valley comes from the Great Recession, where GM, Chrysler and dozens of suppliers went bankrupt and shuttered factories. Since then, there’s been a steady increase in jobs, at a rate that’s grown in recent years, albeit only back to the level of 2007. (The same trend shows up in the data for auto suppliers, who were more likely to have work shifted beyond Mexico to China and elsewhere.) While brand-new U.S. auto factories are rare, automakers have spent billions upgrading and expanding the plants they have, and are running them at three shifts as much as possible. Just this week, Mercedes-Benz moved into the old Indiana factory where Humvees used to get bolted together, so it could build R-Class wagons for export to China.

The knotty truth? Magically shutting down every Mexican auto factory would produce some new work in the United States, but it wouldn’t be a 1-to-1 ratio. Some jobs would shift to other low-cost countries, especially those on the parts supplier side; many would go to Brazil’s fledgling industry. Some would disappear entirely. And even if a bully pulpit could keep Detroit automakers from building factories there, it wouldn’t stop the rest of the world from using Mexico as a NAFTA base. Such an experiment has been running for years in France, where the government has strong powers, including direct ownership stakes, to keep its auto plants open — and has left Citroen and Peugeot struggling to compete. Few businesses are more adept than automakers at shuttling metal around the globe to suit their needs, both for business and politics.

Thanks to wage cuts, American workers have made themselves more competitive globally. This fall, the UAW will press Ford to keep open its huge Michigan car plant, which Ford says will no longer build the Focus. Chances are, the UAW will win another vehicle for that factory. Wherever Ford decides to build the Focus, no president will have the power to halt the change — even a President Trump.