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That's simply not true. Investors once knew that without jobs there is no wealth. There is a reason Henry Ford increased his workers pay. He knew his product was worthless with no one being able afford it.
People can't afford a new truck working at a call center trying to pawn off worthless warranties.
Running off the jobs is going to be a very short term gain.
Ford was plagued by massive turnover and the need to recruit and train. The increase in pay was an attempt to retain workers and avoid collective bargaining. Paying more than the competition mean workers were more likely to show up for work sober and on time and not walk off the job.
The $5/ hr thing was half pay and half bonus. The bonus was limited to male workers. The bonus was tied to living what Ford considered a moral life. The company inspected worker homes and for signs of drinking and gaming. It required immigrant families to learn English.
Ford became a union shop in 1941.
Ford has been and remains a multi- national company.
To work around tariffs and shipping costs, Ford opened its first plant in Canada in 1904. It quickly expanded foreign plants throughout Europe, South America, Asia and South Africa.
He wanted his employees to be able to afford his product.
From his own book.
"The owner, the employees and the buying public are all one and the same and unless an industry can so manage itself to keep wages high and prices low it destroys itself, for otherwise it limits its number of customers. Ones own employees should be ones own best customers".
I've seen fools argue that if this was a legit reason then Boeing should pay enough to buy a jetliner. Hogwash. Boeing only has to sell a few jets. Ford had to sell thousands of cars.
He realized by cutting hours from 60 to 40 and the higher pay would also mean a higher retention but all of it is moot without customers able to buy your product.
Having people being able to actually afford your product is not just a bonus. It's everything.
Guess all CEOs are honest about their motivations, all the time, eh.
He made the business decision to pay more than the competition to increase employee retention / reduce turnover and avoid collective bargaining. It worked, for a blip in time.
For many decades, consumers here in the US have shown little willingness to pay much for most subcompact or compact cars. Lately the same is becoming true even for midsize cars. Make it compact or midsize Crossover/SUV, all of a sudden the wallets open up. From a per-unit profit standpoint, it doesn't make sense to sell compact or subcompact cars at all. But.....non-luxury brands like Ford need them as market-share holders and to prop up Corporate Average Fuel Economy numbers. So it's no surprise they are realigning their manufacturing footprint, making the low gross margin products (like small cars) in the places with lower labor costs, and having the American plants, where labor costs are higher, make higher margin products like trucks, SUVs, and crossovers.
At least if they duck costs by moving we can charge a fee per car to come in, but they save on the rest of the world still.
Imposing a tariff would need to be negotiated and works both ways. What's the impact of a bilateral tariff on those companies and workers who export to Mexico?
Congress would need to approve. Nothing is certain.
Toyota Corolla competes with Ford Focus and right now pricing is almost identical.
Are the profit margins the same?
While Toyota ( US) pays slightly more per hour than Ford , Toyota ( US) does not have the legacy US pension obligation that Ford does. That pension obligation eats into their profit.
Japan's government subsidizes Toyota's healthcare and pension costs for those workers employed in Japan while the US does not do the same for US employees. Conversely, the US guarantees private pensions in the event the pension plan sponsor blows up and for this reason has a serious interest in Ford remaining a viable company going forward.
Ford warned the UAW that it would move the production of the Focus to Mexico if it would not play ball. In reaction, UAW hit Ford with a list of 1400 demands. Obviously Ford was not bluffing.
Lastly, there's the executive comp thing. The total comp for Toyota's 37 member leadership team is less than Ford's CEO's comp package. CEOs of publicly traded corporations do not set their own comp. The US government has no input into CEO comp. It's a board decision. No doubt this has some bearing on all collective bargaining.
Sad to see American companies build brand new billion dollar factories in Mexico. This is so wrong, we need congress to create major penalties and fines for this.
We seem to speak outside both ends of our mouths.
Some want to reduce regulations ( whatever that means) on US businesses to reduce their burden.
And then some of the same people want the federal government to impose new regulations and major consequences , contrary to free market principles.
There will come a time more legacy multi- nationals will consistently derive the majority of profit from off shore business venture that they will be able to walk away from the US market.
How long before the demand of 95% of the world's population will dwarf the demand of 5% that reside in the US?
People assume that any trade deal once passed is forever. Baloney. Any administration has the obligation to review any current deals and either accept them, renegotiate them, or cancel them.
People also assume things like this have to be deal with through new trade deals. It does not. It's a mistake to sit back and expect politicians to address things like this. We need to. I noted a ton of replies on the Ford sites and none of them positive.
People need to address this with their wallets and quit expected politicians to do the work for them. They will not.
Ill find a new job, I am among the 40% of Americans who have an Associate's Degree or higher. If not, I will use my savings to go back to college and get a Bachelor's degree and open up even more opportunities. It's called picking oneself up by the bootstraps instead sitting around whining and hoping for Big Government Daddy Trump to come coddle me.
Total B.S. What jobs are millions and millions of people suppose to go back to school to learn? Are we to train 100 million engineer's when 100 million engineers are not needed? Maybe 100 million new lawyers? 100 million what?
Always these generalizations. "Go back to school". To do what exactly? And no, because this will work for a small percentage of people does not mean it will work for the country overall.
If Mexicans have high IQ and work ethic like the Chinese, there will be virtually no job left in USA.
This is a misnomer also. The Chinese do not have a higher work ethic. China is struggling because the world has become smaller and the Chinese worker is refusing to work for $2 an hour when they know the people that came in to train them are making $30 an hour.
They are demanding a wage that will allow them to purchase the things they are manufacturing.
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